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BG Bunge

Filed: 4 May 21, 5:13pm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from        to       
Commission File Number 001-16625
BUNGE LIMITED
(Exact name of registrant as specified in its charter)
Bermuda98-0231912
(State or other jurisdiction of incorporation or
organization)
(I.R.S. Employer Identification No.)
 
1391 Timberlake Manor Parkway
St. Louis
Missouri63017
(Address of principal executive offices)(Zip Code)
(314) 292-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares, $0.01 par value per share BG New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý  No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ý  No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerýAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.  Yes    No  ý
As of April 30, 2021, the number of shares issued of the registrant was:
Common shares, par value $.01 per share:141,434,374


BUNGE LIMITED
TABLE OF CONTENTS
2

PART I — FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS

BUNGE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
(U.S. dollars in millions, except per share data)
Three Months Ended
March 31,
 20212020
Net sales$12,961 $9,173 
Cost of goods sold(11,814)(8,999)
Gross profit1,147 174 
Selling, general and administrative expenses(271)(295)
Interest income9 
Interest expense(73)(77)
Foreign exchange gains (losses)(10)(6)
Other income (expense) – net263 (9)
Income (loss) from affiliates44 (42)
Income (loss) before income tax1,109 (248)
Income tax (expense) benefit(192)55 
Net income (loss)917 (193)
Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests(86)
Net income (loss) attributable to Bunge831 (184)
Convertible preference share dividends(8)(8)
Adjustment of redeemable noncontrolling interest0 (15)
Net income (loss) available to Bunge common shareholders$823 $(207)
Earnings per common share—basic (Note 19)  
Net income (loss) attributable to Bunge common shareholders - basic$5.86 $(1.46)
Earnings per common share—diluted (Note 19)  
Net income (loss) attributable to Bunge common shareholders - diluted$5.52 $(1.46)
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

BUNGE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(U.S. dollars in millions)
Three Months Ended
March 31,
 20212020
Net income (loss)$917 $(193)
Other comprehensive income (loss):  
 Foreign exchange translation adjustment(257)(852)
Unrealized gains (losses) on designated hedges, net of tax benefit (expense) of $(1) in 2021 and $(5) in 2020(2)51 
Reclassification of realized net (gains) losses to net income, net of tax (benefit) expense of zero in 2021 and $2 in 2020(1)(3)
Total other comprehensive income (loss)(260)(804)
Total comprehensive income (loss)657 (997)
Less: comprehensive (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests(66)25 
Total comprehensive income (loss) attributable to Bunge$591 $(972)
The accompanying notes are an integral part of these condensed consolidated financial statements.

4

BUNGE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(U.S. dollars in millions, except share data)
March 31,
2021
December 31,
2020
ASSETS  
Current assets:  
Cash and cash equivalents$226 $352 
Trade accounts receivable (less allowances of $88 and $93) (Note 5)2,253 1,717 
Inventories (Note 6)8,616 7,172 
Assets held for sale (Note 3)425 672 
Other current assets (Note 7)5,765 6,268 
Total current assets17,285 16,181 
Property, plant and equipment, net3,645 3,775 
Operating lease assets852 868 
Goodwill556 586 
Other intangible assets, net496 529 
Investments in affiliates645 631 
Deferred income taxes319 339 
Other non-current assets (Note 8)735 746 
Total assets$24,533 $23,655 
LIABILITIES AND EQUITY  
Current liabilities:  
Short-term debt (Note 13)$2,706 $2,828 
Current portion of long-term debt (Note 13)9 
Trade accounts payable (includes $546 and $294 carried at fair value)3,842 2,636 
Current operating lease obligations241 235 
Liabilities held for sale (Note 3)84 438 
Other current liabilities (Note 10)4,458 4,840 
Total current liabilities11,340 10,985 
Long-term debt (Note 13)4,341 4,452 
Deferred income taxes384 360 
Non-current operating lease obligations556 581 
Other non-current liabilities (Note 16)658 657 
Redeemable noncontrolling interest (Note 17)
473 415 
Equity (Note 18):
  
Convertible perpetual preference shares, par value $.01; authorized – 21,000,000 shares, issued and outstanding: 2021 and 2020 - 6,899,683 shares (liquidation preference $100 per share)690 690 
Common shares, par value $.01; authorized – 400,000,000 shares; issued and outstanding: 2021 –141,260,402 shares, 2020 – 139,790,238 shares1 
Additional paid-in capital5,468 5,408 
Retained earnings7,982 7,236 
Accumulated other comprehensive income (loss) (Note 18)(6,484)(6,246)
Treasury shares, at cost - 2021 and 2020 - 15,428,313 shares(1,020)(1,020)
Total Bunge shareholders’ equity6,637 6,069 
Noncontrolling interests144 136 
Total equity6,781 6,205 
Total liabilities, redeemable noncontrolling interest and equity$24,533 $23,655 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

BUNGE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(U.S. dollars in millions)
Three Months Ended
March 31,
 20212020
OPERATING ACTIVITIES  
Net income (loss)$917 $(193)
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:  
Impairment charges0 
Foreign exchange (gain) loss on net debt(25)(86)
Bad debt expense1 13 
Depreciation, depletion and amortization106 113 
Share-based compensation expense13 15 
Deferred income tax expense (benefit)36 (68)
(Gain) loss on sale of investments and property, plant and equipment(239)(4)
Other, net(20)48 
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:  
Trade accounts receivable(617)(94)
Inventories(1,448)(751)
Secured advances to suppliers5 (105)
Trade accounts payable1,134 722 
Advances on sales(69)(81)
Net unrealized (gains) losses on derivative contracts100 589 
Margin deposits282 (204)
Marketable securities64 121 
Beneficial interest in securitized trade receivables(1,027)(430)
Other, net(200)(45)
Cash provided by (used for) operating activities(987)(439)
INVESTING ACTIVITIES  
Payments made for capital expenditures(53)(55)
Proceeds from investments0 80 
Payments for investments(88)(104)
Settlements of net investment hedges(9)
Proceeds from beneficial interest in securitized trade receivables969 423 
Proceeds from disposals of businesses and property, plant and equipment331 
Payments for investments in affiliates(35)(1)
Other, net0 46 
Cash provided by (used for) investing activities1,115 394 
FINANCING ACTIVITIES  
Proceeds from short-term debt11,668 8,961 
Repayments of short-term debt(11,757)(8,956)
Proceeds from long-term debt15 78 
Repayments of long-term debt(15)(81)
Proceeds from the exercise of options for common shares44 
Dividends paid to common and preference shareholders(79)(79)
Acquisition of noncontrolling interest(147)
Other, net(19)(9)
Cash provided by (used for) financing activities(290)(84)
Effect of exchange rate changes on cash and cash equivalents and restricted cash33 
Net increase (decrease) in cash and cash equivalents and restricted cash(129)(127)
Cash and cash equivalents and restricted cash - beginning of period381 322 
Cash and cash equivalents and restricted cash - end of period$252 $195 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

BUNGE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
(Unaudited)
(U.S. dollars in millions, except share data)

Convertible Preference SharesCommon Shares
Redeemable Non- Controlling InterestsSharesAmountSharesAmountAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury SharesNon- Controlling InterestsTotal Equity
Balance, January 1, 2021$415 6,899,683 $690 139,790,238 $$5,408 $7,236 $(6,246)$(1,020)$136 $6,205 
Net income (loss)77 — — — — — 831 — — 840 
Other comprehensive income (loss)(19)— — — — — — (238)— (1)(239)
Dividends on common shares, $0.50 per share— — — — — — (71)— — — (71)
Dividends on preference shares, $1.21875 per share— — — — — — (8)— — — (8)
Acquisition of noncontrolling interest— — — — — — (3)— — (3)
Share-based compensation expense— — — — — 13 — — — — 13 
Issuance of common shares, including stock dividends— — — 1,470,164 — 47 (3)— — — 44 
Balance, March 31, 2021$473 6,899,683 $690 141,260,402 $1 $5,468 $7,982 $(6,484)$(1,020)$144 $6,781 
 Convertible
Preference Shares
Common Shares
 Redeemable
Non-
Controlling
Interests
SharesAmountSharesAmountAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Shares
Non-
Controlling
Interests
Total
Equity
Balance, January 1, 2020$397 6,899,683 $690 141,813,142 $$5,329 $6,437 $(5,624)$(920)$117 6,030 
Net income (loss)(8)— — — — — (184)— — (1)(185)
Other comprehensive income (loss)(10)— — — — — — (787)— (7)(794)
Redemption value adjustment15 — — — — — (15)— — — (15)
Dividends on common shares, $0.50 per share— — — — — — (71)— — — (71)
Dividends on preference shares, $1.21875 per share— — — — — — (8)— — — (8)
Dividends to noncontrolling interests on subsidiary common stock— — — — — — — — — (4)(4)
Acquisition of noncontrolling interest— — — — — — — — 
Share-based compensation expense— — — — — 15 — — — — 15 
Issuance of common shares, including stock dividends— — — 333,118 — (2)— — — (2)
Balance, March 31, 2020$394 6,899,683 $690 142,146,260 $1 $5,344 $6,158 $(6,411)$(920)$110 $4,972 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

BUNGE LIMITED AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.    BASIS OF PRESENTATION, PRINCIPLES OF CONSOLIDATION, AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements include the accounts of Bunge Limited (“Bunge” or the "Company"), its subsidiaries and variable interest entities (“VIEs”) in which Bunge is considered to be the primary beneficiary, and as a result, include the assets, liabilities, revenues and expenses of all entities over which Bunge has a controlling financial interest. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included. The condensed consolidated balance sheet at December 31, 2020 has been derived from Bunge’s audited consolidated financial statements at that date. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021. The financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020, forming part of Bunge’s 2020 Annual Report on Form 10-K filed with the SEC on February 19, 2021.
On January 6, 2021, Bunge entered into a series of agreements to acquire a minority interest and certain intellectual property, licensing, and distribution rights in Australian Plant Proteins, a variable interest entity, for $35��million. The Company's exposure to loss related to this unconsolidated investment is limited to the book value of the investment. For additional information on variable interest entities for which Bunge has determined it is not the primary beneficiary, along with the Company's maximum exposure to loss related to these unconsolidated investments, refer to Note 11 - Investments in Affiliates, included in the Company's 2020 Annual Report on Form 10-K.
Effective January 1, 2021, the Company changed its segment reporting to align with its new value chain operational structure, as further described in Note 20- Segment Information. Corresponding prior period amounts have been restated to conform to current period classification.
Effective July 1, 2020, the Company changed its reporting of cash proceeds from and repayments of short-term debt with maturities of 90 days or less to separately present such cash proceeds and repayments in its condensed consolidated statement of cash flows. Prior to July 1, 2020, the Company presented cash proceeds from and repayments of short-term debt with maturities of 90 days or less on a net basis. Prior period amounts have been reclassified to conform to current presentation.
    Cash, Cash Equivalents, and Restricted Cash
    Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the condensed consolidated statement of cash flows. The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.
(US$ in millions)March 31, 2021March 31, 2020
Cash and cash equivalents$226 $193 
Restricted cash included in other current assets26 
Total$252 $195 
Cash paid for taxes, which primarily comprises income tax and value added tax, net of refunds, was $77 million and $71 million for the three months ended March 31, 2021 and 2020, respectively. Cash paid for interest expense was $85 million and $75 million for the three months ended March 31, 2021 and 2020, respectively.

8

2.    ACCOUNTING PRONOUNCEMENTS
    The below outlines new accounting pronouncements and provides updates on certain previously disclosed Accounting Standards Updates ("ASUs").
    New Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments and contracts in an entity’s own equity. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company continues to evaluate the impact of this standard on its condensed consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848)- Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance and is to be applied prospectively from any date beginning March 12, 2020 through December 31, 2022. The Company continues to evaluate the impacts of this standard on its condensed consolidated financial statements.

    Recently Adopted Accounting Pronouncements

    In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)- Simplifying the Accounting for Income Taxes, which reduces complexity in the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company's adoption of this guidance, which was effective January 1, 2021, did not have a material impact on Bunge's condensed consolidated financial statements.

3.    PORTFOLIO RATIONALIZATION INITIATIVES
US Grain Disposition
On April 21, 2020, Bunge announced that it had entered into an agreement to sell a portfolio of interior grain elevators located in the United States, in exchange for cash proceeds of $300 million plus working capital, subject to customary closing adjustments.
In connection with this agreement, the Company classified the assets and liabilities to be sold, which are reported under the Agribusiness reportable segment, as held for sale in its condensed consolidated financial statements as of March 31, 2021. The following table presents the disposal group's major classes of assets and liabilities included in Assets held for sale and Liabilities held for sale, respectively, on the condensed consolidated balance sheets at March 31, 2021:
9

(US$ in millions)March 31,
2021
Inventories$190 
Other current assets92 
Property, plant and equipment, net127 
Operating lease assets7 
Goodwill9 
Assets held for sale$425 
Trade accounts payable$73 
Current operating lease obligations1 
Other current liabilities3 
Non-current operating lease obligations7 
Liabilities held for sale$84 
Rotterdam Oils Refinery Disposition
On November 4, 2020, Bunge announced that its Bunge Loders Croklaan joint venture had entered into an agreement to sell its oil refinery located in Rotterdam, Netherlands. Bunge will lease back the facility from the buyer in a phased transition through 2024 so that it can continue to supply its customers with its products. The transaction, accounted for as an asset sale, closed during the first quarter of 2021. The Company recorded a gain of $219 million on the sale, which was recorded within Other income (expense)—net on the condensed consolidated statement of income.
The following table presents the book value of the major classes of assets and liabilities included in the disposal group, which was reported under the Refined and Specialty Oils reportable segment:
(US$ in millions)
Other current assets$3 
Property, plant and equipment, net94 
Operating lease assets6 
Assets$103 
Current operating lease obligations$1 
Other current liabilities5 
Deferred income taxes7 
Non-current lease obligations5 
Liabilities$18 
Mexico Oils Facility Disposition
During the quarter ended March 31, 2021, Bunge completed the sale of its oils packaging facility in Queretaro, Mexico. The transaction primarily includes the location's property, plant and equipment and related processes. The Company recorded a gain of $19 million on the sale, which was recorded within Other income (expense)—net on the condensed consolidated statement of income.
The following table presents the book value of the major classes of assets included in the disposal group, which was reported under the Refined and Specialty Oils reportable segment.
(US$ in millions)
Property, plant and equipment, net$7 
Goodwill1 
Assets$8 

10

4.    TRADE STRUCTURED FINANCE PROGRAM
    The Company engages in various trade structured finance activities to leverage the value of its global trade flows. These activities include programs under which the Company generally obtains U.S. dollar-denominated letters of credit (“LCs”) from financial institutions, each based on an underlying commodity trade flow, and time deposits denominated in either the local currency of the financial institutions' counterparties or in U.S. dollars, as well as foreign exchange forward contracts and other programs in which trade related payables are set-off against receivables, all of which are subject to legally enforceable set-off agreements.
            As of March 31, 2021 and December 31, 2020, time deposits and LCs of $5,309 million and $4,715 million, respectively, are presented net on the condensed consolidated balance sheets as the criteria of ASC 210-20, Offsetting, have been met. The net losses and gains related to such activities are included as an adjustment to Cost of goods sold in the accompanying condensed consolidated statements of income. At March 31, 2021 and December 31, 2020, time deposits, including those presented on a net basis, carried weighted-average interest rates of 1.53% and 1.87%, respectively. During the three months ended March 31, 2021 and 2020, total net proceeds from issuances of LCs were $1,891 million and $1,490 million, respectively. These cash inflows are offset by the related cash outflows resulting from placement of the time deposits and repayment of the LCs. All cash flows related to the programs are included in operating activities in the condensed consolidated statements of cash flows.
As part of the trade structured finance activities, LCs may be sold to financial institutions on a discounted basis. Bunge does not service derecognized LCs. The terms of the sale may require the Company to continue to make periodic interest payments to financial institutions based on changes in LIBOR for a period of up to 365 days. Bunge’s payment obligation, included in Other current liabilities, to financial institutions as part of the trade structured finance activities, including any unrealized gain or loss on changes in LIBOR, is not significant as of March 31, 2021 and December 31, 2020. The notional amounts of LCs subject to continuing variable interest payments that have been derecognized from the Company's balance sheets as of March 31, 2021 and December 31, 2020 are included in Note 12- Derivative Instruments And Hedging Activities. The net gain or loss included in Cost of goods sold resulting from the fair valuation of such variable interest rate obligations is not significant for the three months ended March 31, 2021 and 2020.

5.    TRADE ACCOUNTS RECEIVABLE AND TRADE RECEIVABLES SECURITIZATION PROGRAM
Trade Accounts Receivable
    Bunge establishes an allowance for lifetime expected credit losses utilizing an aging schedule for each pool of trade accounts receivable. The risk characteristics for each individual receivable were homogenous across the pool of trade accounts receivable and the determination of pools was sufficiently granular to address any differences in risk characteristics. Any receivables that did not share similar risk characteristics were separated into different pools for further analysis. Pools are determined based on risk characteristics such as the type of customer and geography. A default rate is derived using a provision matrix with data based on Bunge's historical receivables information. The default rate is then applied to the pool to determine the allowance for expected credit losses. Given the short term nature of the Company's trade accounts receivable, the default rate is only adjusted if significant changes in the credit profile of the portfolio are identified (e.g., poor crop years, credit issues at the country level, systematic risk), resulting in historic loss rates that are not representative of forecasted losses. Specifically, in establishing appropriate default rates as of March 31, 2021, the Company took into consideration expected impacts on its customers and other debtors in view of the COVID-19 pandemic, as well as other factors, which did not result in a material impact on the financial statements.

    Bunge records and reports accrued interest receivable within the same line item as the related receivable. The allowance for expected credit losses is estimated on the amortized cost basis of the trade accounts receivable, including accrued interest receivable. Bunge recognizes credit loss expense when establishing an allowance for accrued interest receivable.

11

Changes to the allowance for lifetime expected credit losses related to trade accounts receivable are as follows:
Three Months Ended March 31, 2021
Rollforward of the Allowance for Credit Losses (US$ in millions)Short-term
Long-term (1)
Total
Allowance as of January 1, 2021$93 $51 $144 
Current period provisions7 0 7 
Recoveries(9)0 (9)
Write-offs charged against the allowance(1)0 (1)
Foreign exchange translation differences(2)(3)(5)
Allowance as of March 31, 2021$88 $48 $136 
(1)     Long-term portion of the allowance for credit losses included in Other non-current assets.
Three Months Ended March 31, 2020
Rollforward of the Allowance for Credit Losses (US$ in millions)Short-term
Long-term (1)
Total
Allowance as of January 1, 2020$108 $65 $173 
Current period provisions13 13 
Write-offs charged against the allowance(1)(1)
Foreign exchange translation differences(3)(10)(13)
Allowance as of March 31, 2020$117 $55 $172 
(1)     Long-term portion of the allowance for credit losses included in Other non-current assets.

Trade Receivables Securitization Program
Bunge and certain of its subsidiaries participate in a trade receivables securitization program (the “Program”) with a financial institution, as administrative agent, and certain commercial paper conduit purchasers and committed purchasers that provides for funding of receivables sold into the Program.
(US$ in millions)March 31,
2021
December 31,
2020
Receivables sold that were derecognized from Bunge's balance sheet$1,074 $969 
Deferred purchase price included in other current assets$235 $177 

    The table below summarizes the cash flows and discounts of Bunge’s trade receivables associated with the Program. Servicing fees under the Program were not significant in any period.
Three Months Ended
March 31,
(US$ in millions)20212020
Gross receivables sold$3,345 $2,634 
Proceeds received in cash related to transfer of receivables$3,067 $2,485 
Cash collections from customers on receivables previously sold$3,324 $2,341 
Discounts related to gross receivables sold included in Selling, general and administrative expense$2 $

    Non-cash activity for the Program in the reporting period is represented by the difference between gross receivables sold and cash collections from customers on receivables previously sold.

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6.    INVENTORIES
Inventories by segment are presented below. Readily marketable inventories (“RMI”) are agricultural commodity inventories, such as soybeans, soybean meal, soybean oil, corn, and wheat carried at fair value because of their commodity characteristics, widely available markets, and international pricing mechanisms. The Company engages in trading and distribution, or merchandising activities, and part of RMI can be attributable to such activities and is not held for processing. All other inventories are carried at lower of cost or net realizable value.
(US$ in millions)March 31,
2021
December 31,
2020
Agribusiness (1)
$7,349 $6,019 
Refined and Specialty Oils (2)
973 885 
Milling (3)
294 268 
Total$8,616 $7,172 
(1)    Includes RMI of $6,931 million and $5,735 million at March 31, 2021 and December 31, 2020, respectively. Assets held for sale includes RMI of $190 million and $365 million at March 31, 2021 and December 31, 2020, respectively (see Note 3 - Portfolio Rationalization Initiatives). Of these amounts, $5,504 million and $4,369 million can be attributable to merchandising activities at March 31, 2021 and December 31, 2020, respectively.
(2)    Includes RMI of $214 million and $174 million at March 31, 2021 and December 31, 2020, respectively.
(3)    Includes RMI of $50 million and $52 million at March 31, 2021 and December 31, 2020, respectively.

7.    OTHER CURRENT ASSETS
Other current assets consist of the following:
(US$ in millions)March 31,
2021
December 31,
2020
Unrealized gains on derivative contracts, at fair value$3,250 $3,555 
Prepaid commodity purchase contracts (1)
175 174 
Secured advances to suppliers, net (2)
326 380 
Recoverable taxes, net354 385 
Margin deposits532 817 
Marketable securities, at fair value, and other short-term investments351 346 
Deferred purchase price receivable(3)
235 177 
Income taxes receivable10 27 
Prepaid expenses296 231 
Other236 176 
Total$5,765 $6,268 
(1)    Prepaid commodity purchase contracts represent advance payments against contracts for future deliveries of specified quantities of agricultural commodities.
(2)    The Company provides cash advances to suppliers, primarily Brazilian farmers of soybeans, to finance a portion of the suppliers’ production costs. The Company does not bear any of the costs or operational risks associated with the related growing crops. The advances are largely collateralized by future crops and physical assets of the suppliers, carry a local market interest rate, and settle when the farmers' crops are harvested and sold. The secured advances to farmers are reported net of allowances of $3 million at March 31, 2021 and $2 million at December 31, 2020.
    Interest earned on secured advances to suppliers of $9 million and $12 million for the three months ended March 31, 2021 and 2020, respectively, is included in Net sales in the condensed consolidated statements of income.
(3)    Deferred purchase price receivable represents additional credit support for the investment conduits in the Company’s trade receivables securitization program (see Note 5- Trade Accounts Receivable and Trade Receivable Securitization Program).
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Marketable Securities and Other Short-Term Investments - The Company invests in foreign government securities, corporate debt securities, deposits, equity securities, and other securities. The following is a summary of amounts recorded in the Company's condensed consolidated balance sheets as marketable securities and other short-term investments.
(US$ in millions)March 31,
2021
December 31,
2020
Foreign government securities$190 $207 
Corporate debt securities137 136 
Other24 
Total$351 $346 
    As of March 31, 2021 and December 31, 2020, $327 million and $343 million, respectively, of marketable securities and other short-term investments are recorded at fair value. All other investments are recorded at cost, and due to the short-term nature of these investments, their carrying values approximate their fair values. For the three months ended March 31, 2021 and 2020, unrealized losses of $6 million and $16 million, respectively, have been recorded and recognized in Other income (expense) - net for investments held at March 31, 2021 and 2020.

8.    OTHER NON-CURRENT ASSETS
Other non-current assets consist of the following:
(US$ in millions)March 31,
2021
December 31,
2020
Recoverable taxes, net (1)
$109 $115 
Judicial deposits (1)
74 72 
Other long-term receivables, net11 12 
Income taxes receivable
138 150 
Long-term investments (2)
144 136 
Affiliate loans receivable16 15 
Long-term receivables from farmers in Brazil, net (1)
89 38 
Unrealized gains on derivative contracts, at fair value65 111 
Other89 97 
Total$735 $746 
(1)    A significant portion of these non-current assets arise from the Company’s Brazilian operations and their realization could take several years.
(2)    As of March 31, 2021 and December 31, 2020, $12 million and $12 million, respectively, of long-term investments are recorded at fair value.
Recoverable taxes, net - Recoverable taxes are reported net of allowances of $15 million and $17 million at March 31, 2021 and December 31, 2020, respectively.
Judicial deposits - Judicial deposits are funds the Company has placed on deposit with the courts in Brazil. These funds are held in judicial escrow relating to certain legal proceedings pending resolution and bear interest at the Selic rate, which is the benchmark rate of the Brazilian central bank.
Income taxes receivable - Income taxes receivable include overpayments of current income taxes plus accrued interest. These income tax prepayments are expected to be primarily utilized for settlement of future income tax obligations. Income taxes receivable in Brazil bear interest at the Selic rate.
Affiliate loans receivable - Affiliate loans receivable are primarily interest-bearing receivables from unconsolidated affiliates with a remaining maturities of greater than one year.
Long-term receivables from farmers in Brazil, net - The Company provides financing to farmers in Brazil, primarily through secured advances against farmer commitments to deliver agricultural commodities (primarily soybeans) upon harvest of the then-current year’s crop, and through credit sales of fertilizer to farmers. Certain such long-term receivables from farmers
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are originally recorded in Other current assets as prepaid commodity contracts or secured advances to suppliers (see Note 7- Other Current Assets) or Other non-current assets according to their maturity. Advances initially recorded in Other current assets are reclassified to Other non-current assets if collection issues arise and amounts become past due with resolution of such matters expected to take more than one year.
The average recorded investment in long-term receivables from farmers in Brazil for the three months ended March 31, 2021 and the year ended December 31, 2020 was $114 million and $132 million, respectively. The table below summarizes the Company’s recorded investment in long-term receivables from farmers in Brazil and the related allowance amounts.
 March 31, 2021December 31, 2020
(US$ in millions)Recorded
Investment
AllowanceRecorded
Investment
Allowance
For which an allowance has been provided:    
Legal collection process (1)
$61 $53 $73 $60 
Renegotiated amounts6 6 
For which no allowance has been provided:    
Legal collection process (1)
22  22 — 
Renegotiated amounts (2)
2  — 
Other long-term receivables (3)
57  — 
Total$148 $59 $101 $63 
(1)    All amounts in legal process are considered past due upon initiation of legal action.
(2)    These renegotiated amounts are current on repayment terms.
(3)    New advances expected to be realized through farmer commitments to deliver agricultural commodities in crop periods greater than twelve months from the balance sheet date. Such advances are reclassified from Non-current assets to Current assets in later periods depending on the expected date of their realization.
The table below summarizes the activity in the allowance for doubtful accounts related to long-term receivables from farmers in Brazil.
Three Months Ended
March 31,
(US$ in millions)20212020
Beginning balance$63 $96 
Bad debt provisions2 
Recoveries0 (8)
Transfers0 
Foreign exchange translation(6)(22)
Ending balance$59 $68 

9.    INCOME TAXES
    Income tax expense is provided on an interim basis based on management’s estimate of the annual effective income tax rate and includes the tax effects of certain discrete items, such as changes in tax laws or tax rates or other unusual or non-recurring tax adjustments in the interim period in which they occur. In addition, results from jurisdictions projecting a loss for the year where no tax benefit can be recognized are treated discretely in the interim period in which they occur. The effective tax rate is highly dependent on the geographic distribution of the Company’s worldwide earnings or losses and tax regulations in each jurisdiction. Management regularly monitors the assumptions used in estimating its annual effective tax rate and adjusts estimates accordingly, including the realizability of deferred tax assets. Volatility in earnings within a taxing jurisdiction could result in a determination that additional valuation allowance adjustments may be warranted.
    Income tax expense related to continuing operations for the three months ended March 31, 2021 was $192 million. Income tax benefit related to continuing operations for the three months ended March 31, 2020 was $55 million. The effective tax rate for the three months ended March 31, 2021 was lower than the U.S. Statutory rate of 21% primarily due to earnings
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mix. The tax benefit for the three months ended March 31, 2020, was primarily due to an overall pre-tax loss and was materially consistent with the U.S. statutory rate of 21%.
As a global enterprise, the Company files income tax returns that are subject to periodic examination and challenge by federal, state, and foreign tax authorities. In many jurisdictions, income tax examinations, including settlement negotiations or litigation, may take several years to finalize. The Company is currently under examination or litigation in various locations throughout the world. While it is difficult to predict the outcome or timing of resolution of any particular matter, management believes that the condensed consolidated financial statements reflect the largest amount of tax benefit that is more likely than not to be realized.

10.    OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
(US$ in millions)March 31,
2021
December 31,
2020
Unrealized losses on derivative contracts, at fair value$3,097 $3,226 
Accrued liabilities536 652 
Advances on sales (2)
333 406 
Payables for purchase of shares (1)
0 149 
Other492 407 
Total$4,458 $4,840 
(1)    On December 9, 2020, Bunge filed an unconditional tender offer to acquire all of the shares Bunge did not own in Z.T. Kruszwica S.A. Accordingly, the Company recognized a liability for the fair value of the publicly listed shares not owned at December 31, 2020. The tender offer process was completed in the first quarter of 2021.
(2)    Changes to Advances on sales accounts are as follows:
 Three Months Ended
March 31,
(US$ in millions)20212020
Beginning balance$406 $411 
Additions1,249 548 
Transfers to Net sales(726)(597)
Reversals due to cancelled sales orders(593)(32)
Foreign currency translation(4)(5)
Other1 
Ending balance$333 $325 

11.    FAIR VALUE MEASUREMENTS
    Bunge's various financial instruments include certain components of working capital such as trade accounts receivable and trade accounts payable. Additionally, Bunge uses short and long-term debt to fund operating requirements. Trade accounts receivable, trade accounts payable, and short-term debt are stated at their carrying value, which is a reasonable estimate of fair value. See Note 4 - Trade Structured Finance Program for trade structured finance program, Note 8- Other Non-Current Assets for long-term receivables from farmers in Brazil, net and other long-term investments, and Note 13- Debt for long-term debt. Bunge's financial instruments also include derivative instruments and marketable securities, which are stated at fair value.
    The fair value standard describes three levels within its hierarchy that may be used to measure fair value.
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LevelDescriptionFinancial Instrument (Assets / Liabilities)
Level 1Quoted prices (unadjusted) in active markets for identical assets or liabilities.Exchange traded derivative contracts.

Marketable securities in active markets.
Level 2Observable inputs, including adjusted Level 1 quotes, quoted prices for similar assets or liabilities, quoted prices in markets that are less active than traded exchanges and other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.Exchange traded derivative contracts (less liquid market).

Readily marketable inventories.

Over-the-counter (‘‘OTC’’) commodity purchase and sale contracts.

OTC derivatives whose value is determined using pricing models with inputs that are generally based on exchange traded prices, adjusted for location specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data.

Marketable securities in less active markets.
Level 3Unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities.Assets and liabilities whose value is determined using proprietary pricing models, discounted cash flow methodologies or similar techniques.

Assets and liabilities for which the determination of fair value requires significant management judgment or estimation.
    In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy. The lowest level of input that is a significant component of the fair value measurement determines the placement of the entire fair value measurement in the hierarchy. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy levels.
    For a further definition of fair value and the associated fair value levels, refer to Note 15 - Fair Value Measurements, included in the Company's 2020 Annual Report on Form 10-K.
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    The following table sets forth, by level, the Company’s assets and liabilities that were accounted for at fair value on a recurring basis.
 Fair Value Measurements at Reporting Date
 March 31, 2021December 31, 2020
(US$ in millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:        
Readily marketable inventories(1) (Note 6)
$0 $6,756 $629 $7,385 $$6,118 $208 $6,326 
Trade accounts receivable (2)
0 6 0 6 
Unrealized gain on derivative contracts (3):
1      
Interest rate0 64 0 64 100 100 
Foreign exchange0 484 0 484 531 534 
Commodities208 2,422 68 2,698 191 2,783 63 3,037 
Freight92 0 3 95 14 14 
Energy64 0 0 64 44 44 
Credit0 2 0 2 
Other (4)
78 279 0 357 15 352 367 
Total assets$442 $10,013 $700 $11,155 $267 $9,889 $271 $10,427 
Liabilities:        
Trade accounts payable (5)
$0 $333 $213 $546 $$285 $$294 
Unrealized loss on derivative contracts (6):
        
Interest rate0 38 0 38 15 15 
Foreign exchange0 662 0 662 701 701 
Commodities201 2,011 138 2,350 232 2,187 71 2,490 
Freight77 0 1 78 16 16 
Energy16 0 0 16 12 12 
Total liabilities$294 $3,044 $352 $3,690 $260 $3,188 $80 $3,528 
(1)     At March 31, 2021 and December 31, 2020, RMI totaling $190 million and $365 million, respectively, were included in Assets held for sale.
(2)     These receivables are hybrid financial instruments for which Bunge has elected the fair value option.
(3)     Unrealized gains on derivative contracts are generally included in Other current assets. There were $64 million and $111 million included in Other non-current assets at March 31, 2021 and December 31, 2020, respectively. There were $92 million and $63 million included in Assets held for sale at March 31, 2021 and December 31, 2020, respectively.
(4)    Other includes the fair values of marketable securities and investments in Other current assets and Other non-current assets.
(5)    These payables are hybrid financial instruments for which the Company has elected the fair value option. At March 31, 2021 and December 31, 2020, there were $20 million and $40 million, respectively, included in Liabilities held for sale.
(6)    Unrealized losses on derivative contracts are generally included in Other current liabilities. There were $45 million and $7 million included in Other non-current liabilities at March 31, 2021 and December 31, 2020, respectively. There were $3 million and $2 million included in Liabilities held for sale at March 31, 2021 and December 31, 2020, respectively.
    Readily marketable inventories—RMI reported at fair value are valued based on commodity futures exchange quotations, broker or dealer quotations, or market transactions in either listed or OTC markets with appropriate adjustments for differences in local markets where the Company's inventories are located. In such cases, the inventory is classified within Level 2. Certain inventories may utilize significant unobservable data related to local market adjustments to determine fair value. In such cases, the inventory is classified as Level 3.
    If the Company used different methods or factors to determine fair values, amounts reported as unrealized gains and losses on derivative contracts and RMI at fair value in the condensed consolidated balance sheets and condensed consolidated statements of income could differ. Additionally, if market conditions change subsequent to the reporting date, amounts reported
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in future periods as unrealized gains and losses on derivative contracts and RMI at fair value in the condensed consolidated balance sheets and condensed consolidated statements of income could differ.
    Derivatives—The majority of exchange traded futures and options contracts and exchange cleared contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1. The majority of the Company’s exchange-traded agricultural commodity futures are cash-settled on a daily basis and, therefore, are not included in these tables. The Company's forward commodity purchase and sale contracts are classified as derivatives along with other OTC derivative instruments relating primarily to freight, energy, foreign exchange and interest rates, and are classified within Level 2 or Level 3 as described below. The Company estimates fair values based on exchange quoted prices, adjusted as appropriate for differences in local markets. These differences are generally valued using inputs from broker or dealer quotations, or market transactions in either the listed or OTC markets. In such cases, these derivative contracts are classified within Level 2.
    OTC derivative contracts include swaps, options and structured transactions that are generally fair valued using quantitative models that require the use of multiple market inputs including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets which are not highly active, other observable inputs relevant to the asset or liability, and market inputs corroborated by correlation or other means. These valuation models include inputs such as interest rates, prices and indices to generate continuous yield or pricing curves and volatility factors. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain OTC derivatives trade in less active markets with less availability of pricing information and certain structured transactions can require internally developed model inputs that might not be observable in or corroborated by the market.
    Level 3 Measurements
    The following relates to Level 3 measurements. An instrument may transfer into or out of Level 3 due to inputs becoming either observable or unobservable.
    Level 3 Readily marketable inventories and other—The significant unobservable inputs resulting in Level 3 classification for RMI, physically settled forward purchase and sale contracts, and trade accounts payable, relate to certain management estimations regarding costs of transportation and other local market or location-related adjustments, primarily freight related adjustments in the interior of Brazil and the lack of market corroborated information in Canada. In both situations, the Company uses proprietary information such as purchase and sale contracts and contracted prices to value freight, premiums and discounts in its contracts. Movements in the prices of these unobservable inputs alone would not have a material effect on the Company's financial statements as these contracts do not typically exceed one future crop cycle.
    Level 3 Derivatives—Level 3 derivative instruments utilize both market observable and unobservable inputs within the fair value measurements. These inputs include commodity prices, price volatility, interest rates, volumes and locations.
    The tables below present reconciliations for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2021 and 2020. These instruments were valued using pricing models that management believes reflect the assumptions that would be used by a marketplace participant.
Three Months Ended March 31, 2021
(US$ in millions)Readily
Marketable
Inventories
Derivatives,
Net
Trade
Accounts
Payable
Total
Balance, January 1, 2021$208 $(8)$(9)$191 
Total gains and losses (realized/unrealized) included in cost of goods sold (1)
254 (112)3 145 
Purchases540 3 (185)358 
Sales(762)0 0 (762)
Issuances0 (2)0 (2)
Settlements0 34 0 34 
Transfers into Level 3446 (25)(159)262 
Transfers out of Level 3(57)42 137 122 
Balance, March 31, 2021$629 $(68)$(213)$348 
(1) Readily marketable inventories, derivatives, net and trade accounts payable, include gains/(losses) of $130 million, $(125) million and $3 million, respectively, that are attributable to the change in unrealized gains/(losses) relating to Level 3 assets and liabilities still held at March 31, 2021.
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Three Months Ended March 31, 2020
(US$ in millions)Readily
Marketable
Inventories
Derivatives,
Net
Trade
Accounts Payable
Total
Balance, January 1, 2020$231 $(24)$(31)$176 
Total gains and losses (realized/unrealized) included in cost of goods sold (1)
164 14 182 
Purchases678 (236)443 
Sales(627)(627)
Issuances(2)(2)
Settlements(18)61 43 
Transfers into Level 3271 (59)215 
Transfers out of Level 3(98)10 (88)
Balance, March 31, 2020$619 $(16)$(261)$342 
(1)    Readily marketable inventories, derivatives, net and trade accounts payable, includes gains/(losses) of $73 million, $13 million and $5 million, respectively, that are attributable to the change in unrealized gains/(losses) relating to Level 3 assets and liabilities still held at March 31, 2020.

12.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
    The Company uses derivative instruments to manage several market risks, such as interest rate, foreign currency, and commodity risk. Some of those hedges the Company enters into qualify for hedge accounting in the financial statements (Hedge Accounting Derivatives) and some, while intended as economic hedges, do not qualify or are not designated for hedge accounting (Economic Hedge Derivatives). As these derivatives impact the financial statements in different ways, they are discussed separately below.
    Hedge Accounting Derivatives - The Company uses derivatives in qualifying hedge accounting relationships to manage certain of its interest rate, foreign currency, and commodity risks. In executing these hedge strategies, the Company primarily relies on the shortcut and critical terms match methods in designing its hedge accounting strategy, which results in little to no net earnings impact for these hedge relationships. The Company monitors these relationships on a quarterly basis and performs a quantitative analysis to validate the assertion that the hedges are highly effective if there are changes to the hedged item or hedging derivative.
    Fair value hedges - These derivatives are used to hedge the effect of interest rate and currency exchange rate changes on certain long-term debt. Under fair value hedge accounting, the derivative is measured at fair value and the carrying value of hedged debt is adjusted for the change in value related to the exposure being hedged, with both adjustments offset to earnings. In other words, the earnings effect of an increase in the fair value of the derivative will be substantially offset by the earnings effect of the increase in the carrying value of the hedged debt. The net impact of fair value hedge accounting for interest rate swaps is recognized in Interest expense. For cross currency swaps the changes in currency risk on the derivative are recognized in Foreign exchange gains (losses), and the changes in interest rate risk are recognized in Interest expense. Changes in basis risk are held in Accumulated other comprehensive income (loss) until realized through the coupon.
    Cash flow hedges of currency risk - The Company manages currency risk on certain forecasted purchases, sales, and selling, general and administrative expenses with currency forwards. The change in the value of the forward is held in Accumulated other comprehensive income (loss) until the transaction affects earnings, at which time the change in value of the currency forward is reclassified to Net sales, Cost of goods sold or Selling, general and administrative expenses. These hedges mature at various times through December 2021. Of the amount currently in Accumulated other comprehensive income (loss), $(7) million of deferred losses is expected to be reclassified to earnings in the next twelve months.
    Net investment hedges - The Company hedges the currency risk of certain of its foreign subsidiaries with currency forwards and intercompany loans for which the currency risk is remeasured through Accumulated other comprehensive income (loss). For currency forwards, the forward method is used. The change in the value of the forward is classified in Accumulated other comprehensive income (loss) until the transaction affects earnings.
    The table below provides information about the balance sheet values of hedged items and the notional amount of derivatives used in hedging strategies. The notional amount of the derivative is the number of units of the underlying (for example, the notional principal amount of the debt in an interest rate swap). The notional amount is used to compute interest or
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other payment streams to be made under the contract and is a measure of the Company’s level of activity. The Company discloses derivative notional amounts on a gross basis.
(US$ in millions)March 31, 2021December 31, 2020Unit of
Measure
Hedging instrument type:
Fair value hedges of interest rate risk
Carrying value of hedged debt$2,953 $2,465 $ Notional
Cumulative adjustment to long-term debt from application of hedge accounting$27 $92 $ Notional
Interest rate swap$2,938 $2,382 $ Notional
Fair value hedges of currency risk
Carrying value of hedged debt$277 $297 $ Notional
Cross currency swap$277 $297 $ Notional
Cash flow hedges of currency risk
Foreign currency forward$54 $182 $ Notional
Foreign currency option$117 $90 $ Notional
Net investment hedges
Foreign currency forward$1,520 $1,875 $ Notional
    Economic Hedge Derivatives - In addition to using derivatives in qualifying hedge relationships, the Company enters into derivatives to economically hedge its exposure to a variety of market risks it incurs in the normal course of operations.
    Interest rate derivatives are used to hedge exposures to the Company's financial instrument portfolios and debt issuances. The impact of changes in fair value of these instruments is primarily presented in Interest expense.
    Currency derivatives are used to hedge the balance sheet and commercial exposures that arise from the Company's global operations. The impact of changes in fair value of these instruments is presented in Cost of goods sold when hedging commercial exposures and Foreign exchange gains (losses) when hedging monetary exposures.
    Agricultural commodity derivatives are used primarily to manage the Company's inventory and forward purchase and sales contracts. Contracts to purchase agricultural commodities generally relate to current or future crop years for delivery periods quoted by regulated commodity exchanges. Contracts for the sale of agricultural commodities generally do not extend beyond one future crop cycle. The impact of changes in fair value of these instruments is presented in Cost of goods sold.
    The Company uses derivative instruments referred to as forward freight agreements ("FFA") and FFA options to hedge portions of its current and anticipated ocean freight costs. The impact of changes in fair value of these instruments is presented in Cost of goods sold.
    The Company uses energy derivative instruments to manage its exposure to volatility in energy costs. Hedges may be entered into for natural gas, electricity, coal and fuel oil, including bunker fuel. The impact of changes in fair value of these instruments is presented in Cost of goods sold.
    The Company may also enter into other derivatives, including credit default swaps and equity derivatives to manage exposure to credit risk and broader macroeconomic risks, respectively. The impact of changes in fair value of these instruments is presented in Cost of goods sold.
    The table below summarizes the volume of economic derivatives as of March 31, 2021 and December 31, 2020. For those contracts traded bilaterally through the OTC markets (e.g., forwards, forward rate agreements ("FRA"), swaps, and variable interests rate obligations), the gross position is provided. For exchange traded (e.g., futures, FFAs and options) and cleared positions (e.g., energy swaps), the net position is provided.
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 March 31,December 31, 
 20212020Unit of
Measure
(US$ in millions)Long(Short)Long(Short)
Interest rate    
   Swaps$2,293 $(2,363)$1,989 $(1,418)$ Notional
   FRAs$0 $0 $1,216 $(805)$ Notional
Currency
   Forwards$9,498 $(12,157)$11,272 $(13,171)$ Notional
   Swaps$21 $(18)$422 $(413)$ Notional
   Futures$0 $(1)$$(55)$ Notional
   Options$143 $(138)$100 $(142)Delta
Agricultural commodities
   Forwards34,232,205 (37,288,172)38,332,313 (39,743,593)Metric Tons
   Swaps40,855 (5,898,815)(1,700,972)Metric Tons
   Futures0 (5,590,473)(11,422,365)Metric Tons
   Options531,327 (255,601)(280,240)Metric Tons
Ocean freight
   FFA12,440 (14,495)3,055 Hire Days
   FFA options378 0 Hire Days
Natural gas
   Swaps864,929 0 1,040,284 MMBtus
   Futures4,532,500 0 7,210,000 MMBtus
Energy - other
   Swaps355,117 0 413,542 Metric Tons
Other
Swaps and futures$0 $(20)$30 $(30)$ Notional
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The Effect of Derivative Instruments and Hedge Accounting on the Condensed Consolidated Statements of Income
    The tables below summarize the net effect of derivative instruments and hedge accounting on the condensed consolidated statements of income for the three months ended March 31, 2021 and 2020.
  Gain (Loss) Recognized in
Income on Derivative Instruments
  Three Months Ended March 31,
(US$ in millions)20212020
Income statement classificationType of derivative
Cost of goods sold
   Economic hedgesForeign currency$(285)$(917)
Commodities(597)721 
Other (1)
128 (81)
     Total Cost of goods sold $(754)$(277)
Interest expense
   Hedge accountingInterest rate$6 $
   Economic hedgesInterest rate1 
     Total Interest expense $7 $
Foreign exchange gains (losses)
   Hedge accountingForeign currency$(18)$
   Economic hedgesForeign currency87 (184)
     Total Foreign exchange gains (losses)$69 $(177)
Other comprehensive income (loss)
Gains and losses on derivatives used as fair value hedges of foreign currency risk included in other comprehensive income (loss) during the period$1 $
Gains and losses on derivatives used as cash flow hedges of foreign currency risk included in other comprehensive income (loss) during the period (2)
$(4)$(14)
Gains and losses on derivatives used as net investment hedges included in other comprehensive income (loss) during the period
$38 $46 
Foreign currency gains and losses on intercompany loans used as net investment hedges included in other comprehensive income (loss) during the period$0 $22 
Amounts released from accumulated other comprehensive income (loss) during the period
   Cash flow hedge of foreign currency risk$(1)$(6)
(1)    Other includes the results from freight, energy and other derivatives.
(2)  �� Includes $37 million and $6 million Bunge share of other comprehensive income related to cash flow hedges associated with our equity investment in BP Bunge Bioenergia at March 31, 2021 and 2020, respectively.



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13.    DEBT
Bunge’s commercial paper program is supported by an identical amount of committed back-up bank credit lines (the “Liquidity Facility”) provided by banks that are rated at least A-1 by Standard & Poor’s Financial Services and P-1 by Moody’s Investors Service. The cost of borrowing under the Liquidity Facility would typically be higher than the cost of issuing under Bunge’s commercial paper program. At March 31, 2021, there were 0 borrowings outstanding under the commercial paper program and 0 borrowings under the Liquidity Facility, and at December 31, 2020, $549 million of borrowings were outstanding under the commercial paper program and 0 borrowings were outstanding under the Liquidity Facility. The Liquidity Facility is Bunge's only revolving credit facility that requires lenders to maintain minimum credit ratings.
On February 23, 2021, Bunge entered into an unsecured $375 million 364-day Revolving Credit Agreement (the “$375 million Credit Agreement”) with a lender. The $375 million Credit Agreement will bear interest at LIBOR plus an applicable margin, as defined in the $375 million Credit Agreement. The $375 million Credit Agreement matures on February 22, 2022, and there were no borrowings outstanding under this facility as of March 31, 2021.
At March 31, 2021, Bunge had total committed credit facilities of $5,940 million with a number of financial institutions, of which $5,840 million was unused and available. At December 31, 2020, Bunge had total committed credit facilities of $5,565 million with a number of financial institutions, of which $4,072 million was unused and available.
In addition to committed facilities, from time to time, Bunge Limited and/or its financing subsidiaries enter into uncommitted bilateral short-term credit lines as necessary based on its financing requirements. At March 31, 2021 and December 31, 2020 there were $1,250 million and $550 million borrowings, respectively, outstanding under these bilateral short-term credit lines. Loans under such credit lines are non-callable by the respective lenders. In addition, Bunge's operating companies had $981 million and $785 million in short-term borrowings outstanding under local bank lines of credit at March 31, 2021 and December 31, 2020, respectively, to support working capital requirements.
On February 25, 2021, Bunge entered into an unsecured syndicated $250 million 364-day term loan (the “$250 Million Term Loan”) with a group of lenders. The $250 Million Term Loan bears interest at LIBOR plus an applicable margin, as defined in the $250 Million Term Loan. The $250 Million Term Loan matures on February 24, 2022 and was fully drawn as of March 31, 2021.
On February 23, 2021, Bunge entered into an unsecured $125 million 364-day term loan (the “$125 Million Term Loan”) with a lender. The $125 Million Term Loan bears interest at LIBOR plus an applicable margin, as defined in the $125 Million Term Loan. The $125 Million Term Loan matures on February 22, 2022, and was fully drawn as of March 31, 2021.
    The fair value of Bunge’s long-term debt is based on interest rates currently available on comparable maturities to companies with credit standing similar to that of Bunge. The carrying amounts and fair value of long-term debt are as follows:
 March 31, 2021December 31, 2020
(US$ in millions)Carrying
Value
Fair Value
(Level 2)
Carrying
Value
Fair Value
(Level 2)
Long-term debt, including current portion$4,350 $4,546 $4,460 $4,646 

14.    RELATED PARTY TRANSACTIONS
    Bunge purchases agricultural commodity products from certain of its unconsolidated investees and other related parties. Such related party purchases comprised approximately 7% or less of total Cost of goods sold for the three months ended March 31, 2021 and 2020. Bunge also sells agricultural commodity products to certain of its unconsolidated investees and other related parties. Such related party sales comprised approximately 2% or less of total Net sales for the three months ended March 31, 2021 and 2020.
    In addition, Bunge receives services from and provides services to its unconsolidated investees, including tolling, port handling, administrative support, and other services. For the three months ended March 31, 2021 and 2020, such services were not material to the Company's consolidated results.
    At March 31, 2021 and December 31, 2020, receivables related to the above related party transactions, comprised approximately 2% or less of total Trade accounts receivable. At March 31, 2021 and December 31, 2020, payables related to the above related party transactions comprised approximately 4% or less of total Trade accounts payable.
    Bunge believes all transaction values to be similar to those that would be conducted with third parties.

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15.    COMMITMENTS AND CONTINGENCIES
Bunge is party to claims and lawsuits, primarily non-income tax and labor claims in South America, arising in the normal course of business. Bunge is also involved from time to time in various contract, antitrust, environmental litigation and remediation and other litigation, claims, government investigations and legal proceedings. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. Bunge records liabilities related to legal matters when the exposure item becomes probable and can be reasonably estimated. Bunge management does not expect these matters to have a material adverse effect on Bunge’s financial condition, results of operations or liquidity. However, these matters are subject to inherent uncertainties and there exists the remote possibility that a liability arising from these matters could have a material adverse impact in the period the uncertainties are resolved should the liability substantially exceed the amount of provisions included in the condensed consolidated balance sheets. Information regarding the claims appears in Bunge’s Report on Form 10-K for the year ended December 31, 2020. Included in Other non-current liabilities at March 31, 2021 and December 31, 2020 are the following amounts related to these matters:
(US$ in millions)March 31,
2021
December 31,
2020
Non-income tax claims$21 $20 
Labor claims67 54 
Civil and other claims89 96 
Total$177 $170 
Brazil Indirect Taxes
Non-income tax claims - These tax claims relate to ongoing claims against Bunge’s Brazilian subsidiaries, primarily value-added tax claims (ICMS, ISS, IPI and PIS/COFINS).
Bunge expects to pay Brazilian reais (R$) 18 million (approximately $3 million) in 2021 to settle a portion of its outstanding liabilities in amnesty programs in certain Brazilian states regarding certain tax credits.
    On October 8, 2020, the Company was notified that the Brazilian Federal Court of Appeal ruled in favor of the Company in a case against Brazilian tax authorities regarding the right to exclude the value of ICMS from the PIS/COFINS tax basis. The ruling will allow the Company the right to recover amounts unduly paid from August 2009 through December 2020. As a result of the favorable decision, Bunge recorded a pre-tax benefit of R$260 million (approximately $51 million) primarily in the fourth quarter of 2020 for the recovery of taxes, recognized in Net sales, consistent with how the expense was originally incurred. The recorded pre-tax benefit amount excludes interest, which will be recognized when related uncertainties around realization are resolved. Realization of these credits is expected to occur through credits applied to the Company's federal tax liability or through refund or reimbursement requests. The timing of realization of this benefit is dependent upon reimbursement of the amounts through precatory, a process for repayment through government issued certificates, or generation of federal tax liabilities eligible for offset.
As of March 31, 2021, the Brazilian federal and state authorities have concluded examinations of the ICMS and PIS COFINS tax returns and have issued outstanding claims. The Company continues to evaluate the merits of each of these claims and will recognize them when loss is considered probable. The outstanding claims comprise the following:
(US$ in millions)Years ExaminedMarch 31, 2021December 31, 2020
ICMS1990 to Present$175 $191 
PIS/COFINS2004 through 2016$250 $208 
    Labor claims — The labor claims are principally against Bunge’s Brazilian subsidiaries. The labor claims primarily relate to dismissals, severance, health and safety, salary adjustments and supplementary retirement benefits.
Civil and other claims — The civil and other claims relate to various disputes with third parties, including suppliers and customers.
During the first quarter of 2017, Bunge received a notice from the Brazilian Administrative Council for Economic Defense ("CADE") initiating an administrative proceeding against its Brazilian subsidiary and 2 of its employees, certain of its former employees, several other companies in the Brazilian wheat milling industry, and others for alleged anticompetitive activities in the north and northeast of Brazil. This proceeding was put on hold due to a court injunction obtained by one of the defendants in a case related to the application of the statute of limitations. Additionally, in the second quarter of 2018, Bunge received a notification from CADE that it has extended the scope of an existing administrative proceeding relating to alleged anticompetitive practices in the Rio Grande port in Brazil to include certain of Bunge's Brazilian subsidiaries and certain former
25

employees of those subsidiaries. Bunge is defending against these administrative proceedings and, in case it is unsuccessful, the proceedings can be further litigated in the judicial courts. Therefore, Bunge cannot at this time reasonably predict the ultimate outcome of the cases or sanctions, if any, that may be imposed.

Guarantees — Bunge has issued or was a party to the following guarantees at March 31, 2021:
(US$ in millions)Maximum
Potential
Future
Payments
Unconsolidated affiliates guarantee (1)
$269 
Residual value guarantee (2)
258 
Total$527 
(1)    Bunge has issued financial and performance guarantees to certain financial institutions related to debt of certain of its unconsolidated affiliates. The terms of the guarantees are equal to the terms of the related financings and have maturity dates through 2034. There are no recourse provisions or collateral that would enable Bunge to recover any amounts paid under these guarantees. Certain Bunge subsidiaries have guaranteed the obligations of certain of their affiliates and in connection therewith have secured their guarantee obligations through a pledge of certain of their affiliate's shares plus loans receivable from the affiliates to the financial institutions in the event that the guaranteed obligations are enforced. Based on amounts drawn under such debt facilities at March 31, 2021, Bunge's potential liability was $201 million, and has recorded a $12 million obligation related to these guarantees, inclusive of expected lifetime credit losses, which are determined based on historical financial information and are not expected to be material.
(2)    Bunge has issued guarantees to certain financial institutions that are party to certain operating lease arrangements for railcars, barges, and buildings. These guarantees provide for a minimum residual value to be received by the lessor at the conclusion of the lease term. These leases expire at various dates from 2021 through 2026. At March 31, 2021, 0 obligation has been recorded related to these guarantees. Any obligation recorded would be recognized in Current operating lease obligations or Non-current operating lease obligations.
Bunge Limited has provided a guarantee to the Director of the Illinois Department of Agriculture as Trustee for Bunge North America, Inc. (“BNA”), an indirect wholly-owned subsidiary, which guarantees all amounts due and owing by BNA to grain producers and/or depositors in the State of Illinois who have delivered commodities to BNA’s Illinois facilities.
In addition, Bunge Limited has provided full and unconditional parent level guarantees of the outstanding indebtedness under certain credit facilities entered into, and senior notes issued, by its 100% owned subsidiaries. At March 31, 2021, Bunge’s condensed consolidated balance sheet includes debt with a carrying amount of $6,254 million related to these guarantees. This debt includes the senior notes issued by 2 of Bunge’s 100% owned finance subsidiaries, Bunge Limited Finance Corp. and Bunge Finance Europe, B.V. There are largely no restrictions on the ability of Bunge Limited Finance Corp. and Bunge Finance Europe B.V. or any other Bunge subsidiary to transfer funds to Bunge Limited.



16.    OTHER NON-CURRENT LIABILITIES
(US$ in millions)March 31,
2021
December 31,
2020
Labor, legal and other provisions$182 $175 
Pension and post-retirement obligations263 276 
Uncertain income tax positions (1)
48 50 
Unrealized losses on derivative contracts, at fair value (2)
45 
Other120 149 
Total$658 $657 

(1)See Note 9- Income Taxes.
(2)See Note 11- Fair Value Measurements.

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17.    REDEEMABLE NONCONTROLLING INTEREST
    In connection with the acquisition of a 70% ownership interest in IOI Loders Croklaan ("Loders"), the Company has entered into a put/call arrangement with the Loders minority shareholder and may be required or elect to purchase the additional 30% ownership interest in Loders within a specified time frame.
    The Company classifies these redeemable equity securities outside of permanent stockholders’ equity as the equity securities are redeemable at the option of the holder. The carrying amount of redeemable noncontrolling interests is the greater of: (i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss, equity capital contributions and distributions or (ii) the redemption value. Any resulting increases in the redemption amount, in excess of the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss, equity capital contributions and distributions, are affected via a charge against Retained earnings. Additionally, any such charges to Retained earnings will affect Net income (loss) available to Bunge common shareholders as part of Bunge's calculation of earnings per common share.

18.    EQUITY
Accumulated other comprehensive income (loss) attributable to Bunge — The following table summarizes the balances of related after-tax components of Accumulated other comprehensive income (loss) attributable to Bunge:
(US$ in millions)Foreign Exchange
Translation
Adjustment
Deferred
Gains (Losses)
on Hedging
Activities
Pension and Other
Postretirement
Liability
Adjustments
Accumulated
Other
Comprehensive
Income (Loss)
Balance, January 1, 2021$(5,857)$(215)$(174)$(6,246)
Other comprehensive income (loss) before reclassifications(235)(2)0 (237)
Amount reclassified from accumulated other comprehensive income (loss)0 (1)0 (1)
Balance, March 31, 2021$(6,092)$(218)$(174)$(6,484)

(US$ in millions)Foreign Exchange
Translation
Adjustment
Deferred
Gains (Losses)
on Hedging
Activities
Pension and Other
Postretirement
Liability
Adjustments
Accumulated
Other
Comprehensive
Income (Loss)
Balance, January 1, 2020$(5,263)$(170)$(191)$(5,624)
Other comprehensive income (loss) before reclassifications(835)51 (784)
Amount reclassified from accumulated other comprehensive income (loss)(4)(3)
Balance, March 31, 2020$(6,098)$(123)$(190)$(6,411)
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19.    EARNINGS PER COMMON SHARE
    The following table sets forth the computation of basic and diluted earnings per common share.
Three Months Ended
March 31,
(US$ in millions, except for share data)20212020
Net income (loss)$917 $(193)
Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests(86)
Net income (loss) attributable to Bunge831 (184)
Convertible preference share dividends(8)(8)
Adjustment of redeemable noncontrolling interest (1)
0 (15)
Net income (loss) available to Bunge common shareholders - Basic$823 $(207)
Add back convertible preference share dividends8 
Net income (loss) available to Bunge common shareholders - Diluted$831 $(207)
Weighted-average number of common shares outstanding: 
Basic140,342,396 141,899,104 
Effect of dilutive shares:  
—stock options and awards (2)
1,546,457 
—convertible preference shares (3)
8,723,269 
Diluted150,612,122 141,899,104 
Earnings per common share:
Net income (loss) attributable to Bunge common shareholders—basic$5.86 $(1.46)
Net income (loss) attributable to Bunge common shareholders—diluted$5.52 $(1.46)
(1)    The redemption value adjustment of the Company's redeemable noncontrolling interest is added to or deducted from income (loss) as discussed further in Note 17- Redeemable Noncontrolling Interest.
(2)    The weighted-average common shares outstanding-diluted excludes approximately 2 million and 6 million stock options and contingently issuable restricted stock units, which were not dilutive and not included in the computation of earnings per share for the three months ended March 31, 2021 and 2020, respectively.
(3)    Weighted-average common shares outstanding-diluted for the three months ended March 31, 2020 excludes approximately 8 million weighted-average common shares that are issuable upon conversion of the convertible preference shares that were not dilutive and not included in the weighted-average number of common shares.

20.    SEGMENT INFORMATION
Effective January 1, 2021, the Company changed its reporting segments to align with its new value chain operational structure. See Note 1 - Basis of Presentation, Principles of Consolidation, And Significant Accounting Policies.
The Company's operations are now organized, managed and classified into 4 reportable segments - Agribusiness, Refined and Specialty Oils, Milling, and Sugar and Bioenergy, based upon their similar economic characteristics, products and services offered, production processes, types and classes of customer, and distribution methods. The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Corporate and Other.
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The Agribusiness reportable segment is characterized by both inputs and outputs being agricultural commodities and thus high volume and low margin. The Refined and Specialty Oils reportable segment involves the processing, production and marketing of products derived from vegetable oils. The Milling reportable segment involves the processing, production and marketing of products derived primarily from wheat and corn. The Sugar and Bioenergy reportable segment primarily comprises the net earnings in the Company’s 50% interest in BP Bunge Bioenergia, a joint venture with BP p.l.c. (“BP”).
Corporate and Other includes salaries and overhead for corporate functions that are not allocated to the Company’s individual reporting segments because the operating performance of each reporting segment is evaluated by the Company's chief operating decision maker exclusive of these items, as well as certain other activities including Bunge Ventures, the Company's captive insurance, and securitization activities.
Transfers between segments are generally valued at market. Segment revenues generated from these transfers are shown in the following table as “Inter-segment revenues.”
Three Months Ended March 31, 2021
(US$ in millions)AgribusinessRefined and Specialty OilsMillingSugar and
Bioenergy
Corporate and OtherEliminationsTotal
Net sales to external customers$9,791 $2,726 $390 $54 $— $— $12,961 
Inter–segment revenues1,466 102 93 — (1,661)— 
Cost of goods sold(8,905)(2,491)(356)(54)(8)— (11,814)
Gross profit886 235 34 (8)— 1,147 
Selling, general and administrative expenses(80)(86)(23)(82)(271)
Foreign exchange gains (losses)(8)(3)(1)(10)
EBIT attributable to noncontrolling interests (1)
(8)(79)(87)
Other income (expense) - net22 236 263 
Income (loss) from affiliates24 20 44 
Total Segment EBIT (2)
836 308 20 (86)01,086 
Depreciation, depletion and amortization(51)(37)(11)(7)(106)
Total assets18,584 3,745 1,252 129 823 24,533 
Three Months Ended March 31, 2020
(US$ in millions)AgribusinessRefined and Specialty OilsMillingSugar and
Bioenergy
Corporate and OtherEliminationsTotal
Net sales to external customers$6,382 $2,325 $416 $50 $— $— $9,173 
Inter–segment revenues1,207 43 — (1,252)— 
Cost of goods sold(6,385)(2,197)(368)(48)(1)— (8,999)
Gross profit(3)128 48 (1)— 174 
Selling, general and administrative expenses(109)(94)(26)(1)(65)(295)
Foreign exchange gains (losses)(12)(3)(6)
EBIT attributable to noncontrolling interests (1)
Other income (expense) - net(8)(1)(9)
Income (loss) from affiliates(51)(42)
Total Segment EBIT (2)
(121)47 18 (50)(64)0(170)
Depreciation, depletion and amortization(57)(37)(12)(7)(113)
Total assets13,054 3,330 1,214 303 695 18,596 
(1)     Include noncontrolling interests' share of interest and tax with EBIT attributable to noncontrolling interests in order to reconcile to consolidated Noncontrolling interests.
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(2)     Total segment earnings before interest and taxes (“EBIT”) is an operating performance measure used by Bunge’s management to evaluate segment operating activities. Bunge’s management believes Total Segment EBIT is a useful measure of operating profitability, since the measure allows for an evaluation of the performance of its segments without regard to its financing methods or capital structure. In addition, Total Segment EBIT is a financial measure that is widely used by analysts and investors in Bunge’s industry. However, Total Segment EBIT is a non-GAAP financial measure and is not intended to replace Net income (loss) attributable to Bunge, the most directly comparable U.S. GAAP financial measure. Further, Total Segment EBIT is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to Net income (loss) or any other measure of consolidated operating results under U.S. GAAP. See the reconciliation of Total Segment EBIT to Net income (loss) attributable to Bunge in the table below.
A reconciliation of Total Segment EBIT to Net income (loss) attributable to Bunge follows:
Three Months Ended
March 31,
(US$ in millions)20212020
Net income (loss) attributable to Bunge$831 $(184)
Interest income(9)(7)
Interest expense73 77 
Income tax expense (benefit)192 (55)
Noncontrolling interests' share of interest and tax(1)(1)
Total Segment EBIT from continuing operations$1,086 $(170)
The Company’s Net sales comprises sales from commodity contracts that are accounted for under ASC 815, Derivatives and Hedging (ASC 815) and sales of other products and services that are accounted for under ASC 606, Revenue from Contracts with Customers (ASC 606). The following tables provide a disaggregation of Net sales to external customers between sales from contracts with customers and sales from other arrangements:
Three Months Ended March 31, 2021
(US$ in millions)AgribusinessRefined and Specialty Oils
Milling (1)
Sugar and
Bioenergy
Total
Sales from other arrangements$9,359 $186 $(6)$54 $9,593 
Sales from contracts with customers432 2,540 396 0 3,368 
Net sales to external customers$9,791 $2,726 $390 $54 $12,961 
(1)         Sales from other arrangements impacted by indirect taxes associated with intercompany sales activity.
Three Months Ended March 31, 2020
(US$ in millions)AgribusinessRefined and Specialty OilsMillingSugar and
Bioenergy
Total
Sales from other arrangements$6,084 $491 $16 $47 $6,638 
Sales from contracts with customers298 1,834 400 2,535 
Net sales to external customers$6,382 $2,325 $416 $50 $9,173 

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Cautionary Statement Regarding Forward Looking Statements
This report contains both historical and forward looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward looking statements are not based on historical facts, but rather reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward looking statements by using words including “may,” “will,” “should,” “could,” “expect,” “anticipate,” “believe,” “plan,” “intend,” “estimate,” “continue” and similar expressions. These forward looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward looking statements. These factors include the risks, uncertainties, trends and other factors described in our Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) and include: the impacts of the COVID-19 pandemic and other pandemic outbreaks; the effect of weather conditions and the impact of crop and animal disease on our business; the impact of global and regional economic, agricultural, financial and commodities market, political, social and health conditions; changes in governmental policies and laws affecting our business, including agricultural and trade policies, financial markets regulation and environmental, tax and biofuels regulation; the impact of seasonality; the impact of government policies and regulations; the outcome of pending regulatory and legal proceedings; our ability to complete, integrate and benefit from acquisitions, divestitures, joint ventures and strategic alliances; the impact of industry conditions, including fluctuations in supply, demand and prices for agricultural commodities and other raw materials and products that we sell and use in our business, fluctuations in energy and freight costs and competitive developments in our industries; the effectiveness of our capital allocation plans, funding needs and financing sources; the effectiveness of our risk management strategies; operational risks, including industrial accidents, natural disasters and cybersecurity incidents; changes in foreign exchange policy or rates; and other factors affecting our business generally.
The forward looking statements included in this report are made only as of the date of this report, and except as otherwise required by federal securities law, we do not have any obligation to publicly update or revise any forward looking statements to reflect subsequent events or circumstances.
You should refer to “Item 1A.  Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 19, 2021, and “Part II — Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q for a more detailed discussion of these factors.
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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

First Quarter 2021 Overview
You should refer to “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors Affecting Operating Results" in our Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of key factors affecting operating results in each of our business segments. In addition, you should refer to “Item 9A, Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2020 and to “Item 4, Controls and Procedures” in this Quarterly Report on Form 10-Q for the period ended March 31, 2021 for a discussion of our internal controls over financial reporting.
Non-U.S. GAAP Financial Measures
Total segment earnings before interest and taxes (“EBIT”) is an operating performance measure used by Bunge’s management to evaluate segment operating activities. Bunge also uses Core Segment EBIT, Non-Core Segment EBIT and Total Segment EBIT to evaluate the operating performance of Bunge’s Core reportable segments, Non-Core reportable segments, and Total reportable segments together with our Corporate and Other activities. Core Segment EBIT is the aggregate of the earnings before interest and taxes of each of Bunge’s Agribusiness, Refined and Specialty Oils, and Milling segments. Non-Core Segment EBIT is the earnings before interest and taxes of Bunge’s Sugar & Bioenergy segment. Total Segment EBIT is the aggregate of the earnings before interest and taxes of Bunge’s Core and Non-Core reportable segments, together with its corporate and other activities. Bunge’s management believes Core Segment EBIT, Non-Core Segment EBIT and Total Segment EBIT are useful measures of operating profitability since the measures allow for an evaluation of the performance of its segments without regard to financing methods or capital structure. In addition, EBIT is a financial measure that is widely used by analysts and investors in Bunge’s industry. Total Segment EBIT is a non-U.S. GAAP financial measure and is not intended to replace Net income (loss) attributable to Bunge, the most directly comparable U.S. GAAP financial measure. Further, Total Segment EBIT excludes EBIT attributable to noncontrolling interests and is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to Net income (loss) or any other measure of consolidated operating results under U.S. GAAP. See the reconciliation of Net income (loss) attributable to Bunge to Total Segment EBIT below.
Cash provided by (used for) operating activities, adjusted is calculated by including the Proceeds from beneficial interests in securitized trade receivables with Cash provided by (used for) operating activities. Cash provided by (used for) operating activities, adjusted is a non-GAAP financial measure and is not intended to replace Cash provided by (used for) operating activities, the most directly comparable U.S. GAAP financial measure. Our management believes presentation of this measure allows investors to view our cash generating performance using the same measure that management uses in evaluating financial and business performance and trends.
Executive Summary
Net Income (Loss) Attributable to Bunge - For the three months ended March 31, 2021, Net income attributable to Bunge was $831 million, an increase of $1,015 million compared to a net loss attributable to Bunge of $184 million for the three months ended March 31, 2020. The increase for the three month period ended March 31, 2021 is due to higher Segment EBIT in our Core and Non-Core segments, as further discussed in the Segment Overview & Results of Operations section below.
Earnings Per Common Share - Diluted - For the three months ended March 31, 2021, Net income attributable to Bunge common shareholders, diluted, was $5.52 per share, an increase of $6.98 per share, compared to a loss of $1.46 per share for the three months ended March 31, 2020.
EBIT - For the three months ended March 31, 2021, Total Segment EBIT was $1,086 million, an increase of $1,256 million compared to a loss before interest and taxes of $170 million for the three months ended March 31, 2020. The increase in Total Segment EBIT for the three month period ended March 31, 2021 was due to higher Segment EBIT in our Core and Non-Core segments, as further discussed in the Segment Overview & Results of Operations section below.
Income Tax (Expense) Benefit - Income tax expense was $192 million for the three months ended March 31, 2021 compared to income tax benefit of $55 million for the three months ended March 31, 2020. The increase in income tax expense for the three month period ended March 31, 2021 was primarily due to higher pretax income, associated with higher Total Segment EBIT, as noted above.
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Liquidity and Capital Resources – At March 31, 2021, working capital, which equals Total current assets less Total current liabilities, was $5,945 million, an increase of $2,867 million, compared to working capital of $3,078 million at March 31, 2020, and an increase of $749 million compared to working capital of $5,196 million at December 31, 2020. The increases in working capital are primarily due to increased RMI purchases as well as overall, net higher commodity prices at March 31, 2021.
Segment Overview & Results of Operations
Effective January 1, 2021, we changed our reporting segments to align with our new value chain operational structure, as discussed in Note 20- Segment Information. Certain reclassifications of prior period amounts within the reporting segments have been made to conform to current presentation.
Our operations are now organized, managed and classified into four reportable segments based upon their similar economic characteristics, nature of products and services offered, production processes, types and classes of customer, and distribution methods. We further organize these reportable segments into Core operations and Non-core operations. Core operations comprise our Agribusiness, Refined and Specialty Oils, and Milling segments. Non-core operations comprise our Sugar & Bioenergy segment, which itself primarily comprises the Company’s 50% interest in the net earnings of BP Bunge Bioenergia, a joint venture with BP p.l.c. (“BP”).
Our remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Corporate and Other. Corporate and Other includes salaries and overhead for corporate functions that are not allocated to our individual reporting segments because the operating performance of each reporting segment is evaluated by the Company's chief operating decision maker exclusive of these items, as well as certain other activities including Bunge Ventures, the Company's captive insurance, and securitization activities.
A reconciliation of Net income (loss) attributable to Bunge to Total Segment EBIT follows:
Three Months Ended
March 31,
(US$ in millions)20212020
Net income (loss) attributable to Bunge$831 $(184)
Interest income(9)(7)
Interest expense73 77 
Income tax expense (benefit)192 (55)
Noncontrolling interests' share of interest and tax(1)(1)
Total Segment EBIT$1,086 $(170)
Agribusiness Segment EBIT836 (121)
Refined and Specialty Oils Segment EBIT308 47 
Milling Segment EBIT8 18 
Core Segment EBIT1,152 (56)
Corporate and Other EBIT(86)(64)
Sugar and Bioenergy Segment EBIT20 (50)
Non Core Segment EBIT20 (50)
Total Segment EBIT$1,086 $(170)

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Core Segments

Agribusiness Segment
Three Months Ended
March 31,
(US$ in millions, except volumes)20212020
Volumes (in thousand metric tons)36,356 32,681 
Net sales$9,791 $6,382 
Cost of goods sold(8,905)(6,385)
Gross profit886 (3)
Selling, general and administrative expense(80)(109)
Foreign exchange gains (losses)(8)(12)
EBIT attributable to noncontrolling interests(8)
Other income (expense) – net22 (8)
Income (loss) from affiliates24 
Total Agribusiness Segment EBIT$836 $(121)

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020
Agribusiness segment Net sales increased by $3,409 million, or 53%, to $9,791 million for the three months ended March 31, 2021, compared to $6,382 million for the three months ended March 31, 2020. The net increase was primarily due to the following:
In Processing, Net sales increased $1,455 million primarily due to higher average sales prices in our European, Asian and South American soybean processing businesses, higher average sales prices in our European softseed processing businesses and overall higher sales volumes due to high demand.
In Merchandising, Net sales increased $1,954 million due to higher average sales prices, primarily in our global corn business, as well higher sales volumes in our global wheat, corn and oils distribution businesses due to high export demand.
Cost of goods sold increased by $2,520 million, or 39%, to $8,905 million for the three months ended March 31, 2021 compared to $6,385 million for the three months ended March 31, 2020. The net increase was primarily due to the following:
In Processing, Cost of goods sold increased by $677 million due to the higher sales activity noted above, partially offset by favorable mark-to-market results in our South American, European and Asian soybean processing businesses, as well as in our European softseed processing business.
In Merchandising, Cost of goods sold increased by $1,843 million due to the higher sales activity noted above, as well as unfavorable mark-to-market results in our ocean freight business.
Gross profit increased by $889 million, to $886 million for the three months ended March 31, 2021, compared to a loss of $3 million for the three months ended March 31, 2020. The net increase was primarily due to the following:
In Processing, an increase of $778 million was due to higher Net sales in excess of Cost of goods sold, as described above.
In Merchandising, an increase of $111 million was due to higher Net sales in excess of Cost of goods sold, as described above.
Selling, general and administrative (SG&A) expenses decreased $29 million, or 27%, to $80 million for the three months ended March 31, 2021, compared to $109 million for the three months ended March 31, 2020. The decrease was primarily due to a higher portion of variable incentive costs being allocated to Corporate and Other activities in the current year, as well as lower travel costs in the current period as COVID-19 travel restrictions only came into place late in the same period last year.
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Other income (expense) - net increased $30 million, to income of $22 million for the three months ended March 31, 2021, compared to expense of $8 million for the three months ended March 31, 2020. The increase is primarily due to favorable results in our financial services activities.
Income (loss) from affiliates increased $15 million, to income of $24 million for the three months ended March 31, 2021, compared to income of $9 million for the three months ended March 31, 2020. The increase is primarily due to favorable results from our investments in Vietnam Agribusiness Holdings and G3 Global Holdings.
Segment EBIT increased $957 million, or 791%, to $836 million for the three months ended March 31, 2021, compared to a loss before interest and taxes of $121 million for the three months ended March 31, 2020. The net increase was primarily due to the following:
In Processing, an increase of $786 million was primarily due to higher Gross profit and lower SG&A, as described above.
In Merchandising, an increase of $171 million was primarily due to higher Gross profit, lower SG&A, higher Other income (expense) - net, and higher Income (loss) from affiliates, as described above.

Refined and Specialty Oils Segment
Three Months Ended
March 31,
(US$ in millions, except volumes)20212020
Volumes (in thousand metric tons)2,205 2,354 
Net sales$2,726 $2,325 
Cost of goods sold(2,491)(2,197)
Gross profit235 128 
Selling, general and administrative expense(86)(94)
Foreign exchange gains (losses)2 
EBIT attributable to noncontrolling interests(79)
Other income (expense) – net236 — 
Income (loss) from affiliates — 
Total Refined and Specialty Oils Segment EBIT$308 $47 

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020
Refined and Specialty Oils segment Net sales increased $401 million, or 17%, to $2,726 million for the three months ended March 31, 2021, compared to $2,325 million for the three months ended March 31, 2020, primarily due to higher average selling prices in our business-to-business (B2B) operations in China, North America and Europe, driven by strong demand for renewable diesel, as well as higher average selling prices in our European business-to-consumer (B2C) operations. The above increases were partially offset by lower volumes, primarily in our North American, European and South American food service operations, associated with ongoing COVID-19 impacts, as well as the sale of our Brazilian margarine and mayonnaise assets in the fourth quarter of 2020.
Cost of goods sold increased $294 million, or 13%, to $2,491 million for the three months ended March 31, 2021, compared to $2,197 million for the three months ended March 31, 2020. The increase in Cost of goods sold was due to higher raw material commodity prices in the current year, partially offset by lower overall volumes as described under Net sales above, and more favorable mark-to-market results.
Gross profit for the three months ended March 31, 2021 increased $107 million, or 84%, to $235 million, compared to $128 million for the three months ended March 31, 2020. The increase was due to the increase in Net sales in excess of the increase in Cost of goods sold, as described above, as well as lower travel costs in the current period as COVID-19 travel restrictions only came into place late in the same period last year.
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SG&A expenses decreased $8 million, or 9%, to $86 million for the three months ended March 31, 2021, compared to $94 million for the three months ended March 31, 2020, primarily due to a higher portion of variable incentive costs being allocated to Corporate and Other as well as a large one-off bad debt expense recorded in the prior year.
EBIT attributable to noncontrolling interests, an expense when subsidiaries with noncontrolling interests generate earnings before interest and tax, versus income when subsidiaries with noncontrolling interests generate loss before interest and tax, decreased by $85 million, to an expense of $79 million for the three months ended March 31, 2021 compared to income of $6 million for the three months ended March 31, 2020. The expense for the current year is primarily due to improved results in Bunge Loders Croklaan, including the noncontrolling interest share of the gain on sale of our Rotterdam oils refinery.
Other income (expense), net was income of $236 million for the three months ended March 31, 2021 compared to zero for the three months ended March 31, 2020. Current period income was primarily due to a $219 million gain on the sale of our Rotterdam oils refinery, as well as a $19 million gain on the sale of a Mexican oils packaging facility.
Segment EBIT increased $261 million, or 555%, to $308 million for the three months ended March 31, 2021, compared to $47 million for the three months ended March 31, 2020. The increase was primarily due to higher Gross profit and Other income (expense), net, and lower SG&A, partially offset by EBIT attributable to noncontrolling interests, as described above.

Milling Segment

Three Months Ended
March 31,
(US$ in millions, except volumes)20212020
Volumes (in thousand metric tons)1,739 1,938 
Net sales$390 $416 
Cost of goods sold(356)(368)
Gross profit34 48 
Selling, general and administrative expense(23)(26)
Foreign exchange gains (losses)(3)(3)
EBIT attributable to noncontrolling interests — 
Other income (expense) – net (1)
Income (loss) from affiliates — 
Total Milling Segment EBIT$8 $18 

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020
Milling segment Net sales decreased $26 million, or 6%, to $390 million for the three months ended March 31, 2021, compared to $416 million for the three months ended March 31, 2020. The decrease was primarily due to lower volumes in the U.S., primarily due to the sale of our U.S. rice business in 2020, as well as lower volumes in South America, driven by lower food service and bakery demand in the face of COVID-19 lockdowns, partially offset by higher sales prices in our South American and Mexican wheat milling business.
Cost of goods sold decreased $12 million, or 3%, to $356 million for the three months ended March 31, 2021, compared to $368 million for the three months ended March 31, 2020. The decrease was primarily driven by the volume decrease in Net sales noted above, partially offset by higher raw material wheat prices in South America and Mexico.
Gross profit decreased $14 million, or 29%, to $34 million for the three months ended March 31, 2021, compared to $48 million for the three months ended March 31, 2020. The decrease was primarily due to the decrease in Net sales in excess of Cost of goods sold, as described above.
SG&A expenses decreased $3 million, or 12%, to $23 million for the three months ended March 31, 2021, compared to $26 million for the three months ended March 31, 2020. The decrease was primarily due to favorable
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translation impacts following a weaker Brazilian real versus the U.S. dollar in the current quarter, as well as a higher portion of variable incentive costs being allocated to Corporate and Other.
Segment EBIT decreased $10 million, or 56%, to $8 million for the three months ended March 31, 2021, compared to $18 million for the three months ended March 31, 2020. The decrease was due to lower gross profit, partially offset by lower SG&A, as described above.
Corporate and Other
Three Months Ended
March 31,
(US$ in millions, except volumes)20212020
Net sales$ $— 
Cost of goods sold(8)(1)
Gross profit(8)(1)
Selling, general and administrative expense(82)(65)
Foreign exchange gains (losses)(1)
EBIT attributable to noncontrolling interests — 
Other income (expense) – net5 — 
Income (loss) from affiliates — 
Total Corporate and Other$(86)$(64)

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020
Segment EBIT decreased $22 million, or 34%, to a loss of $86 million for the three months ended March 31, 2021, compared to a loss of $64 million for the three months ended March 31, 2020. The decrease is primarily due to increased corporate SG&A as a result of higher variable incentive costs being allocated to Corporate and Other in the current year, in addition to higher overall variable incentive costs compared to the prior year period.

Non Core Segment

Sugar and Bioenergy Segment
Three Months Ended
March 31,
(US$ in millions, except volumes)20212020
Volumes (in thousand metric tons)103 86 
Net sales$54 $50 
Cost of goods sold(54)(48)
Gross profit 
Selling, general and administrative expense (1)
Foreign exchange gains (losses) — 
EBIT attributable to noncontrolling interests — 
Other income (expense) – net — 
Income (loss) from affiliates20 (51)
Total Sugar and Bioenergy Segment EBIT$20 $(50)

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020
Segment EBIT increased $70 million, or 140%, to income of $20 million for the three months ended March 31, 2021, compared to a loss of $50 million for the three months ended March 31, 2020. The increase is due to more favorable
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results from our investment BP Bunge Bioenergia, driven by higher sugar and ethanol volumes and higher average sugar sales prices in the current period.

Interest - A summary of consolidated interest income and expense follows:
Three Months Ended
March 31,
(US$ in millions)20212020
Interest income$9 $
Interest expense(73)(77)

Interest income was $9 million for the three months ended March 31, 2021, compared to $7 million for the three months ended March 31, 2020. Interest expense decreased by $4 million, to $73 million for the three months ended March 31, 2021, compared to $77 million for the three months ended March 31, 2020. The decrease in net interest expense was due to lower variable interest rates in the three months ended March 31, 2021, partially offset by higher average debt levels during the three months ended March 31, 2021 as discussed below.

Liquidity and Capital Resources
Our main financial objectives are to prudently manage financial risks, ensure consistent access to liquidity and minimize cost of capital in order to efficiently finance our business and maintain balance sheet strength. We generally finance our ongoing operations with cash flows generated from operations, issuance of commercial paper, borrowings under various bilateral and syndicated revolving credit facilities, term loans and proceeds from the issuance of senior notes. Acquisitions and long-lived assets are generally financed with a combination of equity and long-term debt.
Working Capital
As of
US$ in millions, except current ratioMarch 31, 2021March 31, 2020December 31, 2020
Cash and cash equivalents$226 $193 $352 
Trade accounts receivable, net2,253 1,616 1,717 
Inventories8,616 5,451 7,172 
Other current assets(1)
6,190 3,840 6,940 
Total current assets$17,285 $11,100 $16,181 
Short-term debt$2,706 $736 $2,828 
Current portion of long-term debt9 509 
Trade accounts payable3,842 3,368 2,636 
Current operating lease obligations241 217 235 
Other current liabilities(2)
4,542 3,192 5,278 
Total current liabilities$11,340 $8,022 $10,985 
Working capital(3)
$5,945 $3,078 $5,196 
Current ratio(3)
1.52 1.38 1.47 
(1)    Comprises Assets held for sale and Other current assets.
(2)    Comprises Liabilities held for sale and Other current liabilities.
(3)    Working capital is Total current assets less Total current liabilities; Current ratio represents Total current assets divided by Total current liabilities.
Working capital was $5,945 million at March 31, 2021, an increase of $749 million, or 14%, from working capital of $5,196 million at December 31, 2020, and an increase of $2,867 million, or 93% from working capital of $3,078 million at March 31, 2020.
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Cash and Cash Equivalents - Cash and cash equivalents were $226 million at March 31, 2021, a decrease of $126 million from $352 million at December 31, 2020 and an increase of $33 million from $193 million at March 31, 2020. Cash balances are managed in accordance with our investment policy, the objectives of which are to preserve the principal value of our cash assets, maintain a high degree of liquidity, and deliver competitive returns subject to prevailing market conditions. Cash balances are typically invested in short-term deposits with highly-rated financial institutions and in U.S. government securities.
Trade accounts receivable, net - Trade accounts receivable, net were $2,253 million at March 31, 2021, an increase of $536 million from $1,717 million at December 31, 2020 and an increase of $637 million from $1,616 million at March 31, 2020. The increases from December 31, 2020 and March 31, 2020 were primarily due to increased Net sales in the current period driven by factors described in the Segment Overview & Results of Operations above.
Inventories - Inventories were $8,616 million at March 31, 2021, an increase of $1,444 million from $7,172 million at December 31, 2020 and an increase of $3,165 million from $5,451 million at March 31, 2020. The increases from both comparative periods were primarily related to higher volumes on hand and higher average commodity prices at the end of the current period.
RMI comprises agricultural commodity inventories, such as soybeans, soybean meal, soybean oil, corn, and wheat that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms. Total RMI reported at fair value was $7,195 million, $5,961 million and $4,279 at March 31, 2021, December 31, 2020 and March 31, 2020, respectively (see Note 6- Inventories, to our condensed consolidated financial statements).
Other current assets - Other current assets were $6,190 million at March 31, 2021, a decrease of $750 million from $6,940 million at December 31, 2020 and an increase of $2,350 million from $3,840 million at March 31, 2020. The decrease from December 31, 2020 was primarily due to a lower unrealized gains on derivative contracts, lower margin deposits, as well as the sale of our Rotterdam oils facility during the quarter (see Note 3 - Portfolio Rationalization Initiatives to our condensed consolidated financial statements) that was classified as held for sale at December 31, 2020. The increase from March 31, 2020 was primarily due to higher unrealized gains on derivative contracts and our U.S. grains business, which is classified as held for sale in the current period.
Short-term debt - Short-term debt, including the current portion of long-term debt, was $2,715 million at March 31, 2021, a decrease of $121 million from $2,836 million at December 31, 2020 and an increase of $1,470 million from $1,245 million at March 31, 2020. The higher Short-term debt levels at March 31, 2021 and December 31, 2020 compared to March 31, 2020 were to fund higher working capital levels, primarily purchases of RMI.
Trade accounts payable - Trade accounts payable were $3,842 million at March 31, 2021, an increase of $1,206 million from $2,636 million at December 31, 2020 and an increase of $474 million from $3,368 million at March 31, 2020. The increases in Trade accounts payable from December 31, 2020 and March 31, 2020 were primarily due to higher average inventory purchase volumes and prices during the current period.
Other current liabilities - Other current liabilities were $4,542 million at March 31, 2021, a decrease of $736 million from $5,278 million at December 31, 2020 and an increase of $1,350 million from $3,192 million at March 31, 2020. The variances from December 31, 2020 and March 31, 2020 were primarily due to decreases and increases, respectively, in the balances of unrealized losses on derivative contracts, liabilities held for sale (see Note 3 - Portfolio Rationalization Initiatives, to our condensed consolidated financial statements), and a payment to acquire the noncontrolling equity interests in our Z.T. Kruszwica S.A. subsidiary during the three months ended March 31, 2021 (see Note 10- Other Current Liabilities to our condensed consolidated financial statements).
Debt
Financing Arrangements and Outstanding Indebtedness - We conduct most of our financing activities through a centralized financing structure that provides the Company with efficient access to debt and capital markets. This structure includes a master trust, the primary assets of which consist of intercompany loans made to Bunge Limited and its subsidiaries. Certain of Bunge Limited’s 100% owned finance subsidiaries, including Bunge Limited Finance Corp., Bunge Finance Europe B.V. and Bunge Asset Funding Corp., fund the master trust with short and long-term debt obtained from third parties, including through our commercial paper program and certain credit facilities, as well as the issuance of senior notes. Borrowings by these finance subsidiaries carry full, unconditional guarantees by Bunge Limited.
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    Revolving Credit Facilities - At March 31, 2021, we had $5,940 million of aggregate committed borrowing capacity under our commercial paper program and various revolving bilateral and syndicated credit facilities, of which $5,840 million was unused and available. The following table summarizes these facilities as of the periods presented:
(US$ in millions) Total Committed
Capacity
Borrowings Outstanding
Commercial Paper Program
and Revolving Credit Facilities
MaturitiesMarch 31,
2021
March 31,
2021
December 31,
2020
Commercial paper2023$600 $— $549 
Revolving credit facilities2021 - 20235,340 100 944 
Total $5,940 $100 $1,493 

On February 23, 2021, we entered into an unsecured committed $375 million 364-day Revolving Credit Agreement (the “$375 Million Credit Agreement”) with a lender. The $375 Million Credit Agreement will bear interest at LIBOR plus an applicable margin, as defined in the $375 Million Credit Agreement. The $375 Million Credit Agreement matures on February 22, 2022, and there were no borrowings outstanding under this facility as of March 31, 2021.
We had no borrowings outstanding at March 31, 2021 under our unsecured $1,250 million 364-day Revolving Credit Agreement (the “$1.25 Billion Credit Agreement”) with a group of lenders. The $1.25 Billion Credit Agreement includes a $1,000 million tranche (“Tranche A”) and a $250 million tranche (“Tranche B”). Borrowings under the $1.25 Billion Credit Agreement bear interest at LIBOR plus an applicable margin, as defined in the $1.25 Billion Credit Agreement. Each lender under Tranche A is required to fund all borrowing requests delivered by us unless such lender has delivered a declining lender notice to the administrative agent by 9.00am (New York City time) on the date such borrowing request is delivered. The lenders under Tranche B do not have the right to deliver a declining lender notice to us. We may also, from time to time, request one or more of the existing or new lenders to increase the total participations and commitments under Tranche A and Tranche B of the $1.25 Billion Credit Agreement by an aggregate amount up to $250 million pursuant to an accordion provision. The $1.25 Billion Credit Agreement matures on October 21, 2021.     
We had no borrowings outstanding at March 31, 2021 under our unsecured $1,100 million five-year syndicated revolving credit agreement (the "$1.1. Billion Credit Agreement") with certain lenders party thereto maturing December 14, 2023. We have the option to request an extension of the maturity date of the $1.1. Billion Credit Agreement for two additional one-year periods, subject to the consent of the lenders. Borrowings under the $1.1. Billion Credit Agreement bear interest at LIBOR plus a margin, which will vary from 1.00% to 1.625%, based on the credit ratings of our senior long-term unsecured debt ("Rating Level"). Amounts under the $1.1. Billion Credit Agreement that remain undrawn are subject to a commitment fee at rates ranging from 0.09% to 0.225%, varying based on the Rating Level. We may, from time to time, request one or more of the existing lenders or new lenders to increase the total commitments under the $1.1. Billion Credit Agreement by up to $200 million pursuant to an accordion provision.
We had $100 million of borrowings outstanding at March 31, 2021 under our $1,750 million unsecured syndicated revolving credit facility with certain lenders party thereto maturing December 12, 2022 (the ‘‘$1.75 Billion 2022 Facility’’). Borrowings under the $1.75 Billion 2022 Facility bear interest at LIBOR plus a margin, which will vary from 0.30% to 1.30% per annum, based on the credit ratings of our senior long-term unsecured debt. The applicable margin is also subject to certain premiums or discounts tied to criteria determined by certain sustainability targets. We also pay a fee that varies from 0.10% to 0.40% per annum, based on the utilization of the $1.75 Billion 2022 Facility. Amounts under the $1.75 Billion 2022 Facility that remain undrawn are subject to a commitment fee payable quarterly in arrears at a rate of 35% of the margin specified above, which varies based on the rating level at each quarterly payment date. We may, from time to time, with the consent of the facility agent, request one or more of the existing lenders or new lenders to increase the total commitments under the $1.75 Billion 2022 Facility by up to $250 million pursuant to an accordion provision.
    We had no borrowings outstanding at March 31, 2021 under our unsecured $865 million revolving credit facility, maturing September 6, 2022 (the "$865 Million 2022 Facility"). Borrowings under the $865 Million 2022 Facility bear interest at LIBOR plus a margin, which will vary from 1.00% to 1.75% per annum, based on the credit ratings of our senior long-term unsecured debt. Amounts under the $865 Million 2022 Facility that remain undrawn are subject to a commitment fee payable quarterly based on the average undrawn portion of the $865 Million 2022 Facility at rates ranging from 0.125% to 0.275%, based on the credit ratings of our senior long-term unsecured debt.
     Our commercial paper program is supported by committed back-up bank credit lines (the ‘‘Liquidity Facility’’) equal to the amount of the commercial paper program provided by financial institutions that are required to be rated at least
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A-1 by Standard & Poor’s and P-1 by Moody’s Investor Services. The cost of borrowing under the Liquidity Facility would typically be higher than the cost of issuance under our commercial paper program. At March 31, 2021, no borrowings were outstanding under the commercial paper program and no borrowings were outstanding under the Liquidity Facility. The Liquidity Facility is our only revolving credit facility that requires lenders to maintain minimum credit ratings.
In addition to committed credit facilities, from time to time, through our financing subsidiaries, we enter into bilateral short-term credit lines as necessary based on our financing requirements. At March 31, 2021, there were $1,250 million of borrowings outstanding under these bilateral short-term credit lines.
Short and long-term debt - Our short and long-term debt decreased by $232 million, or 3.2%, to $7,056 million at March 31, 2021, from $7,288 million at December 31, 2020, primarily due to increased cash generated from operations, excluding beneficial interests in securitized trade receivables. For the three months ended March 31, 2021, our average short and long-term debt outstanding was approximately $7,538 million, compared to approximately $4,975 million for the three months ended March 31, 2020. Our long-term debt balance was $4,350 million at March 31, 2021, compared to $4,460 million at December 31, 2020, a decrease of $110 million, or 2.5%.
On February 25, 2021, we entered into an unsecured syndicated $250 million 364-day term loan (the “$250 Million Term Loan”) with a group of lenders. The $250 Million Term Loan bears interest at LIBOR plus an applicable margin, as defined in the $250 Million Term Loan. The $250 Million Term Loan matures on February 24, 2022 and was fully drawn as of March 31, 2021.
On February 23, 2021, we entered into an unsecured $125 million 364-day term loan (the “$125 Million Term Loan”) with a lender. The $125 Million Term Loan bears interest at LIBOR plus an applicable margin, as defined in the $125 Million Term Loan. The $125 Million Term Loan matures on February 22, 2022 and was fully drawn as of March 31, 2021.
The following table summarizes our short-term debt at March 31, 2021.
(US$ in millions)Outstanding
Balance at
March 31, 2021
Weighted Average
Interest Rate at
March 31, 2021
Highest Balance
Outstanding During
Quarter Ended March 31, 2021
Average Balance
During Quarter Ended
March 31, 2021
Weighted Average
Interest Rate
During Quarter Ended March 31, 2021
Bank borrowings (1)
$2,706 3.69 %$3,427 $2,935 4.73 %
Commercial paper— — %549 194 0.27 %
Total$2,706 $3,976 $3,129 
(1)    Includes $376 million of local currency bank borrowings in certain Central and Eastern European, South American, and Asia Pacific countries at a weighted average interest rate of 19.37% as of March 31, 2021.
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The following table summarizes our short- and long-term indebtedness:
(US$ in millions)March 31,
2021
December 31,
2020
Short-term debt: (1)
 
Short-term debt (2)
$2,706 $2,828 
Current portion of long-term debt9 
Total short-term debt2,715 2,836 
Long-term debt (3):
  
Term loan due 2024 - three-month Yen LIBOR plus 0.75% (Tranche A)277 297 
Term loan due 2024 - three-month LIBOR plus 1.30% (Tranche B)89 89 
3.00% Senior Notes due 2022399 399 
1.85% Senior Notes due 2023 - Euro
938 982 
4.35% Senior Notes due 2024597 597 
1.63% Senior Notes due 2025596 595 
3.25% Senior Notes due 2026696 696 
3.75% Senior Notes due 2027596 595 
Other162 210 
Subtotal4,350 4,460 
Less: Current portion of long-term debt(9)(8)
Total long-term debt4,341 4,452 
Total debt$7,056 $7,288 
(1)    Includes secured debt of $2 million and $1 million at March 31, 2021 and December 31, 2020, respectively.
(2)    Includes $376 million and $558 million of local currency bank borrowings in certain Central and Eastern European, South American and Asia-Pacific countries at a weighted average interest rate of 19.37% and 24.54% as of March 31, 2021 and December 31, 2020, respectively.
(3)    Includes secured debt of $27 million and $5 million at March 31, 2021 and December 31, 2020, respectively.
    Credit Ratings Bunge’s debt ratings and outlook by major credit rating agencies at March 31, 2021 were as follows:
 
Short-term
Debt (1)
Long-term
Debt
Outlook
Standard & Poor’sA-1BBBStable
Moody’sP-1Baa3Stable
FitchF1BBB-Stable
(1)    Short-term debt rating applies only to Bunge Asset Funding Corp., the issuer under our commercial paper program.
Our debt agreements do not have any credit rating downgrade triggers that would accelerate maturity of our debt. However, credit rating downgrades would increase our borrowing costs under our syndicated credit facilities and, depending on their severity, could impede our ability to obtain credit facilities or access the capital markets in the future on competitive terms. A significant increase in our borrowing costs could impair our ability to compete effectively in our business relative to competitors with higher credit ratings.
Our credit facilities and certain senior notes require us to comply with specified financial covenants including minimum net worth, minimum current ratio, a maximum debt to capitalization ratio and limitations on secured indebtedness. We were in compliance with these covenants as of March 31, 2021.
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Equity
Total equity is set forth in the following table:
(US$ in millions)March 31,
2021
December 31, 2020
Equity:  
Convertible perpetual preference shares$690 $690 
Common shares
Additional paid-in capital5,468 5,408 
Retained earnings7,982 7,236 
Accumulated other comprehensive income (loss)(6,484)(6,246)
Treasury shares, at cost - 2021 and 2020 - 15,428,313 shares(1,020)(1,020)
Total Bunge shareholders’ equity6,637 6,069 
Noncontrolling interest144 136 
Total equity$6,781 $6,205 
Total Bunge shareholders’ equity was $6,637 million at March 31, 2021, compared to $6,069 million at December 31, 2020, an increase of $568 million. The increase during the three months ended March 31, 2021 was primarily due to $831 million of net income attributable to Bunge and $47 million in issuance of common shares for exercises of share based compensation, partially offset by $238 million translation losses, and $71 million and $8 million of declared dividends to common and preferred shareholders, respectively.
As of March 31, 2021, we had 6,899,683 of 4.875% cumulative convertible perpetual preference shares outstanding with an aggregate liquidation preference of $690 million. Each convertible perpetual preference share has an initial liquidation preference of $100, which will be adjusted for any accumulated and unpaid dividends. The convertible perpetual preference shares carry an annual dividend of $4.875 per share, payable quarterly. As a result of adjustments made to the initial conversion price because cash dividends paid on Bunge Limited’s common shares exceeded certain specified thresholds, each convertible perpetual preference share is convertible, at the holder’s option, at any time into 1.2643 Bunge Limited common shares, based on the conversion price of $79.0976 per share, subject to certain additional anti-dilution adjustments (which represents 8,723,269 Bunge Limited common shares at March 31, 2021). At any time, if the closing price of our common shares equals or exceeds 130% of the conversion price for 20 trading days during any consecutive 30 trading days (including the last trading day of such period), we may elect to cause the convertible perpetual preference shares to be automatically converted into Bunge Limited common shares at the then-prevailing conversion price. The convertible perpetual preference shares are not redeemable by us at any time.
Share repurchase program - In May 2015, we established a new program for the repurchase of up to $500 million of our issued and outstanding common shares. The program has no expiration date. There were no shares repurchased under this program during the three months ended March 31, 2021 or the three months ended March 31, 2020. Total repurchases under the program from its inception in May 2015 through March 31, 2021 were 7,253,440 shares for $400 million.

Cash Flows
As of
US$ in millionsMarch 31, 2021March 31, 2020
Cash provided by (used for) operating activities$(987)$(439)
Cash provided by (used for) investing activities1,115 394 
Cash provided by (used for) financing activities(290)(84)
Effect of exchange rate changes on cash and cash equivalents and restricted cash33 
Net increase (decrease) in cash and cash equivalents and restricted cash$(129)$(127)
Our cash flows from operations vary depending on, among other items, the market prices and timing of the purchase and sale of our inventories. Generally, during periods when commodity prices are rising, our Agribusiness operations require increased use of cash to support working capital to acquire inventories and fund daily settlement
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requirements on exchange traded futures that we use to minimize price risk related to the purchase and sale of our inventories.
For the three months ended March 31, 2021, our cash and cash equivalents and restricted cash decreased by $129 million, compared to a decrease of $127 million for the three months ended March 31, 2020.
Operating: Cash used for operating activities was $987 million for the three months ended March 31, 2021, an increase of $548 million, compared to $439 million for the three months ended March 31, 2020. The increase was due to higher working capital funding requirements, primarily RMI and beneficial interests in securitized trade receivables, partially offset by higher net income during the three months ended March 31, 2021.
As of
US$ in millionsMarch 31, 2021March 31, 2020
Cash provided by (used for) operating activities$(987)$(439)
Proceeds from beneficial interest in securitized trade receivables969 423 
Cash provided by (used for) operating activities, adjusted$(18)$(16)

Cash used for operating activities, adjusted for proceeds from beneficial interests in securitized trade receivables was $18 million for the three months ended March 31, 2021, compared to $16 million for the three months ended March 31, 2020. The increase was due to higher working capital funding requirements, primarily RMI, which was mostly offset by higher net income during the three months ended March 31, 2021.
Certain of our non-U.S. operating subsidiaries are primarily funded with U.S. dollar-denominated debt, while currency risk is hedged with U.S. dollar-denominated assets. The functional currency of our operating subsidiaries is generally the local currency. The financial statements of our subsidiaries are calculated in the functional currency, and when the local currency is the functional currency, translated into U.S. dollars. U.S. dollar-denominated loans are remeasured into their respective functional currencies at exchange rates at the applicable balance sheet date. Also, certain of our U.S. dollar functional operating subsidiaries outside the U.S. are partially funded with local currency borrowings, while the currency risk is hedged with local currency denominated assets. Local currency loans in U.S. dollar functional currency subsidiaries outside the U.S. are remeasured into U.S. dollars at the exchange rate on the applicable balance sheet date. The resulting gain or loss is included in our condensed consolidated statements of income as foreign exchange gains or losses. For the three months ended March 31, 2021, we recorded a foreign currency gain on our debt of $25 million, and for the three months ended March 31, 2020, we recorded a foreign currency gain on our debt of $86 million, which were included as adjustments to reconcile net income to cash used for operating activities in the line item “Foreign exchange (gains) loss on net debt” in our condensed consolidated statements of cash flows. These adjustments are required as the gains and losses are non-cash items that arise from financing activities and therefore will have no impact on cash flows from operations.
Investing: Cash provided by investing activities was $1,115 million for the three months ended March 31, 2021, an increase of $721 million, compared to cash provided by investing activities of $394 million for the three months ended March 31, 2020. The increase was due to higher proceeds from beneficial interests in securitized trade receivables and proceeds from the sales of our oils facilities in Rotterdam and Mexico (see Note 3 - Portfolio Rationalization Initiatives to our condensed consolidated financial statements), partially offset by payments made for an affiliate investment, during the three months ended March 31, 2021.
Financing: Cash used for financing activities was $290 million for the three months ended March 31, 2021, a $206 million increase, compared to cash used for financing activities of $84 million for the three months ended March 31, 2020. During the three months ended March 31, 2021, we had net cash repayments of short-term and long-term debt of $89 million, primarily used to fund seasonal working capital requirements, mostly comprising RMI, paid $147 million to acquire the noncontrolling equity interest of our Polish subsidiary, Z.T. Kruszwica S.A. (see Note 10- Other Current Liabilities to our condensed consolidated financial statements), and paid dividends of $79 million to our common and preferred shareholders. In the three months ended March 31, 2020, we had net cash proceeds from short-term and long-term debt of $2 million and we paid dividends of $79 million to our common and preferred shareholders.

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Off-Balance Sheet Arrangements

Please refer to Note 15- Commitments and Contingencies to our condensed consolidated financial statements for details concerning our off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.



Dividends
    We paid a regular quarterly cash dividend of $0.50 per share on March 2, 2021 to common shareholders of record on February 16, 2021. In addition, we paid a quarterly dividend of $1.21875 per share on our cumulative convertible perpetual preference shares on March 1, 2021 to shareholders of record on February 15, 2020. On February 18, 2021, we announced that our Board of Directors had approved a regular quarterly cash dividend of $0.50 per common share. The dividend will be payable on June 2, 2021 to common shareholders of record on May 19, 2021. We also announced on February 18, 2021 that on June 1, 2021 we will pay a quarterly cash dividend of $1.21875 per share on our cumulative convertible perpetual preference shares to shareholders of record on May 18, 2021. On May 4, 2021, we announced that our Board of Directors had approved a regular quarterly cash dividend of $0.525 per common share. The dividend will be payable on September 2, 2021 to common shareholders of record on August 19, 2021. We also announced on May 4, 2021 that on September 1, 2021 we will pay a quarterly cash dividend of $1.21875 per share on our cumulative convertible perpetual preference shares to shareholders of record on August 15, 2021.

Critical Accounting Policies and Estimates
Critical accounting policies are defined as those policies that are significant to our financial condition and results of operations and require management to exercise significant judgment. For a complete discussion of our accounting policies, see Note 1 to our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 19, 2021. Following is a material change to our critical accounting policies during the three months ended March 31, 2021. For recent accounting pronouncements refer to Note 2 - Accounting Pronouncements, to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Effective January 1, 2021, we changed our reporting segments to align with our new value chain structure, as discussed in Note 20- Segment Information. Certain reclassifications of prior period amounts within the reporting segments have been made to conform to current presentation.
Effective July 1, 2020, we changed our reporting of cash proceeds from and repayments of short-term debt with maturities of 90 days or less to separately present such cash proceeds and repayments in our condensed consolidated statement of cash flows. Prior to July 1, 2020, the Company presented cash proceeds from and repayments of short-term debt with maturities of 90 days or less on a net basis. Prior period amounts have been reclassified to conform to current presentation.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Risk Management
As a result of our global activities, we are exposed to changes in, among other things, agricultural commodity prices, transportation costs, foreign currency exchange rates, interest rates, and energy costs, which may directly or indirectly affect our results of operations and financial position. We actively monitor and manage these various market risks associated with our business activities. Our risk management decisions take place in various locations, but exposure limits are centrally set and monitored, operating under a global governance framework. Additionally, our Board of Directors' Enterprise Risk Management Committee oversees our global market risk governance framework, including risk management policies and limits.
We use derivative instruments for the purpose of managing the exposures associated with commodity prices, transportation costs, foreign currency exchange rates, interest rates, and energy costs, and for positioning our overall portfolio relative to expected market movements in accordance with established policies, limits and procedures. We enter into derivative instruments primarily with commodity exchanges in the case of commodity futures and options, major financial institutions in the case of foreign currency and interest rate derivatives, or approved exchange clearing shipping companies in the case of ocean freight. While these derivative instruments are subject to fluctuations in value, for hedged exposures those fluctuations are generally offset by the changes in fair value of the underlying exposures. The derivative instruments that we use for hedging purposes are intended to reduce the volatility of our results of operations, however, they can occasionally result in earnings volatility, which may be material. See Note 12- Derivative Instruments And Hedging Activities to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a more detailed discussion of our use of derivative instruments.
Credit and Counterparty Risk
Through our normal business activities, we are subject to significant credit and counterparty risks that arise through normal commercial sales and purchases, including forward commitments to buy or sell, and through various other over-the-counter ("OTC") derivative instruments that we use to manage risks inherent in our business activities. We define credit and counterparty risk as a potential financial loss due to the failure of a counterparty to honor its obligations. The exposure is measured based upon several factors, including unpaid accounts receivable from counterparties and unrealized gains from forward cash contracts, as well as OTC derivative instruments. Credit and counterparty risk also includes sovereign credit risk. We actively monitor credit and counterparty risk through regular reviews of exposures and credit analysis by regional credit teams, as well as reviews by our Management Credit Committee that monitors counterparty exposures. We record provisions for counterparty losses from time to time as a result of our credit and counterparty analysis.
During periods of tight conditions in global credit markets, downturns in regional or global economic conditions, low levels of available (funding) liquidity and/or significant price volatility, credit and counterparty risks are heightened. This increased risk is monitored through, among other things, exposure reporting, increased communication with key counterparties, management reviews and specific focus on counterparties or groups of counterparties that we may determine as high risk. In addition, we have limited exposures and limits in certain cases and reduced our use of non-exchange cleared derivative instruments.
Commodities Risk
We operate in many areas of the food industry, from agricultural raw materials to the production and sale of branded food and other specialty products. As a result, we purchase and produce various materials, many of which are agricultural commodities, including: soybeans, soybean oil, soybean meal, palm oil, softseeds (including sunflower seed, rapeseed and canola) and related oil and meal derived from them, wheat, barley, shea nut, and corn. In addition, we produce bioenergy products as a consequence of our production of soybean oil and other oil feedstocks. Agricultural and energy commodities are subject to price fluctuations due to a number of unpredictable factors that may create price risk. As described above, we are also subject to the risk of counterparty non-performance under forward purchase or sale contracts. From time to time, we have experienced instances of counterparty non-performance as a result of significant declines in counterparty profitability under these contracts due to significant movements in commodity and energy prices between the time the contracts were executed and the contractual forward delivery period.
We enter into various derivative contracts with the primary objective of managing our exposure to adverse price movements in the agricultural and energy commodities used and produced in our business operations. We have established policies that limit the amount of unhedged fixed price agricultural commodity positions permissible for our operating companies, which are generally a combination of volumetric and value-at-risk (VaR) limits. We measure and review our net commodities position on a daily basis. We also employ stress testing techniques, including stressed VaR techniques in order to quantify our exposures to price and liquidity risks under non-normal or event driven market conditions.
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Our daily net agricultural commodity position consists of inventory, forward purchase and sale contracts, and OTC and exchange traded derivative instruments, including those used to hedge portions of our production requirements. The fair value of that position is a summation of the fair values calculated for each agricultural commodity by valuing all of our commodity positions at quoted market prices for the period, where available, or using a close proxy. VaR is calculated on the net position and monitored at the 95% confidence interval. In addition, scenario analysis and custom stress testing are regularly performed. For example, one measure of market risk is estimated as the potential loss in fair value resulting from a hypothetical 10% adverse change in prices. The results of this analysis, which may differ from actual results, are as follows:
Three Months Ended
March 31, 2021
Year Ended
December 31, 2020
(US$ in millions)ValueMarket
Risk
ValueMarket
Risk
Highest daily aggregated position value$1,706 $(171)$1,374 $(137)
Lowest daily aggregated position value$669 $(67)$54 $(5)
Ocean Freight Risk
Ocean freight and bunker fuel represent a significant portion of our operating costs. Market prices for ocean freight and bunker fuel vary depending on the supply and demand for ocean vessels, global economic conditions, the price of crude petroleum oil and other factors. We enter into time charter agreements for time on ocean freight vessels based on forecasted requirements for the purpose of transporting agricultural commodities. Our time charter agreements generally have terms ranging from two months to approximately seven years. We use financial derivatives to hedge portions of our ocean freight costs (generally freight forward agreements) and bunker fuel costs. The ocean freight derivatives are included in Other current assets and Other current liabilities on the condensed consolidated balance sheets at fair value.
Energy Risk
We purchase various energy commodities such as electricity, natural gas and bunker fuel, that are used to operate our manufacturing facilities and ocean freight vessels. We also refine and produce biofuels. The energy commodities are subject to price risk. We use financial derivatives, including exchange traded and OTC swaps and options for various purposes to manage our exposure to volatility in energy costs and market prices. These energy derivatives are included in Other current assets and Other current liabilities on the condensed consolidated balance sheets at fair value.
Currency Risk
Our global operations require active participation in foreign exchange markets. Our primary foreign currency exposures are the Brazilian real, Canadian dollar, the Euro and the Chinese yuan/renminbi. To reduce the risk arising from foreign exchange rate fluctuations, we enter into derivative instruments, such as foreign currency forward contracts, swaps and options. The changes in market value of such contracts have a high correlation to the price changes in the related currency exposures. The potential loss in fair value for such net currency positions resulting from a hypothetical 10% adverse change in foreign currency exchange rates as of March 31, 2021 was not material.
When determining our exposure, we exclude intercompany loans that are deemed to be permanently invested. The repayments of permanently invested intercompany loans are neither planned nor anticipated in the foreseeable future and therefore, are treated as analogous to equity for accounting purposes. As a result, the foreign exchange gains and losses on these borrowings are excluded from the determination of Net income (loss) and recorded as a component of Accumulated other comprehensive income (loss) in the condensed consolidated balance sheets. Included in Other comprehensive income (loss) are foreign exchange losses of $60 million for the three months ended March 31, 2021 and foreign exchange losses of $140 million for the year ended December 31, 2020 related to permanently invested intercompany loans.
    Interest Rate Risk
We have debt in fixed and floating rate instruments. We are exposed to market risk due to changes in interest rates. We may enter into interest rate swap agreements to manage our interest rate exposure related to our debt portfolio.
The aggregate fair value of our short and long-term debt based on market yields at March 31, 2021, was $7,252 million with a carrying value of $7,056 million. There was no significant change in our interest rate risk at March 31, 2021.
A hypothetical 100 basis point increase in the interest yields on our senior note debt at March 31, 2021 would result in a decrease of approximately $17 million in the fair value of our debt. Similarly, a decrease of 100 basis points in the interest yields on our debt at March 31, 2021 would cause an increase of approximately $2 million in the fair value of our debt.
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A hypothetical 100 basis point change in LIBOR would result in a change of approximately $61 million in our interest expense on our variable rate debt at March 31, 2021. Some of our variable rate debt is denominated in currencies other than in U.S. dollars and is indexed to non-U.S. dollar-based interest rate indices, such as EURIBOR and TJLP and certain benchmark rates in local bank markets. As such, the hypothetical 100 basis point change in interest rate ignores the potential impact of any currency movements.

ITEM 4.    CONTROLS AND PROCEDURES
Disclosure Controls and Procedures - Disclosure controls and procedures are the controls and other procedures that are designed to provide reasonable assurance that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the principal executive and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
As of March 31, 2021, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as that term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report on Form 10-Q.
Internal Control Over Financial Reporting - There have been no changes in the Company’s internal control over financial reporting during the first quarter ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, we continue to migrate certain processes to shared business service models from across our operations in order to consolidate back office functions while standardizing our processes and financial systems globally. In connection with these initiatives, we have and will continue to align and streamline the design and operation of our internal controls over financial reporting. These initiatives are not in response to any identified deficiency or weakness in our internal controls over financial reporting but are expected over time to result in changes to such internal controls over financial reporting.

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PART II.
INFORMATION
ITEM 1.    LEGAL PROCEEDINGS
From time to time, we are involved in litigation and other claims, investigations and proceedings incidental to our business. While the outcome of these matters cannot be predicted with certainty, we believe the outcome of these proceedings, net of established reserves, will not have a material adverse effect on our consolidated financial position, results of operations or liquidity.
For a discussion of certain legal and tax matters, see Note 15- Commitments and Contingencies, to our condensed consolidated financial statements included as part of this Quarterly Report on Form 10-Q. Additionally, we are a party to a large number of labor and civil and other claims, primarily relating to our Brazilian operations. We have reserved an aggregate of $33 million and $60 million, for labor and civil claims, respectively, as of March 31, 2021. The labor claims primarily relate to dismissals, severance, health and safety, salary adjustments and supplementary retirement benefits. The civil claims relate to various legal proceedings and disputes, including disputes with suppliers and customers and include approximately 154 million Brazilian reais (approximately $27 million as of March 31, 2021) related to a legacy environmental claim in Brazil.

ITEM 1A.    RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2020 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.


ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.    OTHER INFORMATION
None.

ITEM 6.    EXHIBITS
(a) The exhibits in the accompanying Exhibit Index on page E-1 are filed or furnished as part of this Quarterly Report.
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EXHIBIT INDEX
 Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002
 Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002
 Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
 Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
101 SCHXBRL Taxonomy Extension Schema Document
101 CALXBRL Taxonomy Extension Calculation Linkbase Document
101 LABXBRL Taxonomy Extension Labels Linkbase Document
101 PREXBRL Taxonomy Extension Presentation Linkbase Document
101 DEFXBRL Taxonomy Extension Definition Linkbase Document
101 INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*    Filed herewith.
E-1

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  BUNGE LIMITED
   
   
Date: May 4, 2021 By:/s/ John W. Neppl
   John W. Neppl
   Executive Vice President, Chief Financial Officer
    
    
   /s/ J. Matt Simmons, Jr.
   J. Matt Simmons, Jr.
   Controller and Principal Accounting Officer
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